Existing-Home Sales Surged 5.6% in November

Washington, DC, December 20, 2017-Total existing-home sales jumped 5.6% to a seasonally adjusted annual rate of 5.81 million in November from an upwardly revised 5.50 million in October, according to the National Association of Realtors.

After last month’s increase, sales are 3.8% higher than a year ago and are at their strongest pace since December 2006 (6.42 million).

Lawrence Yun, NAR chief economist, says home sales in most of the country expanded at a tremendous clip in November. “Faster economic growth in recent quarters, the booming stock market and continuous job gains are fueling substantial demand for buying a home as 2017 comes to an end,” he said. “As evidenced by a subdued level of first-time buyers and increased share of cash buyers, move-up buyers with considerable down payments and those with cash made up a bulk of the sales activity last month. The odds of closing on a home are much better at the upper end of the market, where inventory conditions continue to be markedly better.”

The median existing-home price for all housing types in November was $248,000, up 5.8% from November 2016 ($234,400). November’s price increase marks the 69th straight month of year-over-year gains.

Total housing inventory at the end of November dropped 7.2% to 1.67 million existing homes available for sale and is now 9.7% lower than a year ago (1.85 million) and has fallen year-over-year for 30 consecutive months. Unsold inventory is at a 3.4-month supply at the current sales pace, which is down from 4.0 months a year ago.

“The anticipated rise in mortgage rates next year could further cut into affordability if these staggeringly low supply levels persist,” said Yun. “Price appreciation is too fast in a lot of markets right now. The increase in homebuilder optimism must translate to significantly more new construction in 2018 to help ease these acute inventory shortages.”

First-time buyers were 29% of sales in November, which is down from 32% both in October and a year ago. NAR’s 2017 Profile of Home Buyers and Sellers – released earlier this year – revealed that the annual share of first-time buyers was 34%.