WASHINGTON (December 21, 2016) — A big surge in the Northeast and a smaller gain in the South pushed existing-home sales up in November for the third consecutive month, according to the National Association of Realtors®.
Total existing-home sales 1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 0.7 percent to a seasonally adjusted annual rate of 5.61 million in November from a downwardly revised 5.57 million in October. November's sales pace is now the highest since February 2007 (5.79 million) and is 15.4 percent higher than a year ago (4.86 million) 2.
Lawrence Yun, NAR chief economist, says it's been an outstanding three-month stretch for the housing market as 2016 nears the finish line. "The healthiest job market since the Great Recession and the anticipation of some buyers to close on a home before mortgage rates accurately rose from their historically low level have combined to drive sales higher in recent months," he said. "Furthermore, it's no coincidence that home shoppers in the Northeast — where price growth has been tame all year — had the most success last month."
The median existing-home price 3 for all housing types in November was $234,900, up 6.8 percent from November 2015 ($220,000). November's price increase marks the 57th consecutive month of year-over-year gains.
Total housing inventory 4 at the end of November dropped 8.0 percent to 1.85 million existing homes available for sale, and is now 9.3 percent lower than a year ago (2.04 million) and has fallen year-over-year for 18 straight months. Unsold inventory is at a 4.0-month supply at the current sales pace, which is down from 4.3 months in October.
"Existing housing supply at the beginning of the year was inadequate and is now even worse heading into 2017," added Yun. "Rental units are also seeing this shortage. As a result, both home prices and rents continue to far outstrip incomes in much of the country."
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage leaped to 3.77 percent in November from 3.47 percent in October (highest rate since January at 3.87 percent). The average commitment rate for all of 2015 was 3.85 percent.
First-time buyers were 32 percent of sales in November, which is down from 33 percent in October but up from 30 percent a year ago. NAR's 2016 Profile of Home Buyers and Sellers — released in November 5 — revealed that the annual share of first-time buyers was 35 percent (32 percent in 2015), which is the highest since 2013 (38 percent).
"First-time buyers in higher priced cities will be most affected by rising prices and mortgage rates next year and will likely have to stretch their budget or make compromises on home size, price or location," said Yun.
Properties typically stayed on the market for 43 days in November, up from 41 days in October but down considerably from a year ago (54 days). Short sales were on the market the longest at a median of 110 days in November, while foreclosures sold in 55 days and non-distressed homes took 41 days. Forty-two percent of homes sold in November were on the market for less than a month.
NAR President William E. Brown, a Realtor® from Alamo, California, says consumers looking to buy in 2017 should find a Realtor®, seek a preapproval from a lender and start their home search now. "It's never too early to begin viewing listings online and in person with a Realtor® to identify what's available within the budget and where," said Brown. "There are fewer available homes during the winter months but also fewer buyers. With mortgage rates and prices expected to increase as the year goes on, the first few months of 2017 could be an opportune time to close on a home."
Inventory data from Realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in November were Billings, Mont., 23 days; San Jose-Sunnyvale-Santa Clara, Calif., 41 days; San Francisco-Oakland-Hayward, Calif., 42 days; Nashville-Davidson-Murfreesboro-Franklin, Tenn., 45 days; and Provo-Orem, Utah, at 46 days.
All-cash sales were 21 percent of transactions in November, down from 22 percent in October and 27 percent a year ago. Individual investors, who account for many cash sales, purchased 12 percent of homes in November, down from 13 percent in October and 16 percent a year ago. Fifty-eight percent of investors paid in cash in November, which matches the lowest share since August 2009.
Distressed sales 6 — foreclosures and short sales — rose to 6 percent in November, up from 5 percent in October but down from 9 percent a year ago. Four percent of November sales were foreclosures and 2 percent were short sales. Foreclosures sold for an average discount of 17 percent below market value in November (18 percent in October), while short sales were discounted 16 percent (unchanged from October).
Single-family and Condo/Co-op Sales
Single-family home sales declined 0.4 percent to a seasonally adjusted annual rate of 4.95 million in November from 4.97 million in October, but are still 16.2 percent above the 4.26 million pace a year ago. The median existing single-family home price was $236,500 in November, up 6.8 percent from November 2015.
Existing condominium and co-op sales jumped 10.0 percent to a seasonally adjusted annual rate of 660,000 units in November, and are now 10.0 percent above a year ago. The median existing condo price was $222,600 in November, which is 5.8 percent above a year ago.
November existing-home sales in the Northeast hiked 8.0 percent to an annual rate of 810,000, and are now 15.7 percent above a year ago. The median price in the Northeast was $263,000, which is 3.3 percent above November 2015.
In the Midwest, existing-home sales decreased 2.2 percent to an annual rate of 1.33 million in November, but are still 18.8 percent above a year ago. The median price in the Midwest was $180,300, up 6.5 percent from a year ago.
Existing-home sales in the South in November rose 1.4 percent to an annual rate of 2.22 million, and are now 11.6 percent above November 2015. The median price in the South was $206,900, up 9.2 percent from a year ago.
Existing-home sales in the West declined 1.6 percent to an annual rate of 1.25 million in November, but are still 19.0 percent higher than a year ago. The median price in the West was $345,400, up 8.5 percent from November 2015.
The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
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NOTE: For local information, please contact the local association of Realtors® for data from local multiple listing services. Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.
1 Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR rebenchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.
Existing-home sales, based on closings, differ from the U.S. Census Bureau's series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90 percent of total home sales, are based on a much larger data sample — about 40 percent of multiple listing service data each month — and typically are not subject to large prior-month revisions.
The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.
2 Existing-home sales in November 2015 declined 8.1 percent (from October 2015) because of contract delays related to the rollout of Know Before You Owe. They rebounded to 5.45 million in December 2015.
3 The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.
The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR's quarterly metro area price reports.
4 Total inventory and month's supply data are available back through 1999, while single-family inventory and month's supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90 percent of transactions and condos were measured only on a quarterly basis).
5 Survey results represent owner-occupants and differ from separately reported monthly findings from NAR's Realtors® Confidence Index, which include all types of buyers. Investors are under-represented in the annual study because survey questionnaires are mailed to the addresses of the property purchased and generally are not returned by absentee owners. Results include both new and existing homes.
6 Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR's Realtors® Confidence Index, posted at Realtor.org.
NOTE: NAR's Pending Home Sales Index for November will be released December 28, and Existing-Home Sales for December will be released January 24; release times are 10:00 a.m. ET.