Existing-Home Sales Fell 10.5% in November

Washington, DC, December 22, 2015—Existing-home sales dropped off considerably in November, down 10.5%, to the slowest pace in 19 months, but some of the decrease was likely because of an apparent rise in closing timeframes that may have pushed some transactions into December, according to the National Association of Realtors.

All four major regions saw sales declines in November.

Total existing home sales fell to a seasonally adjusted annual rate of 4.76 million in November (lowest since April 2014 at 4.75 million) from a downwardly revised 5.32 million in October.

After last month's decline (largest since July 2010 at 22.5%), sales are now 3.8% below a year ago, the first year-over-year decrease since September 2014.

Lawrence Yun, NAR chief economist, says multiple factors led to November's sales decline, but the primary reason could be an anomaly as the industry adjusts to the new Know Before You Owe rule. "Sparse inventory and affordability issues continue to impede a large pool of buyers' ability to buy, which is holding back sales," he said. "However, signed contracts have remained mostly steady in recent months, and properties sold faster in November. Therefore it's highly possible the stark sales decline wasn't because of sudden, withering demand."

According to Yun, although realtors are adjusting accordingly to the Know Before You Owe initiative, the main takeaway so far has been the need for longer closing times. According to NAR's Realtors Confidence Index, 47% of respondents in November reported that they are experiencing a longer time to close compared to a year ago, up from 37% in October.