November US existing home sales from the National Association of Realtors rose 1.9% to 6.34 million below market forecasts of 6.52 million. Pressure coming from the supply of existing homes for which is at 2.1 months vs 2.4 month prior. Higher rates is creating affordability pressures for prospective buyers.
Mortgage rates have risen from record low levels as the economy reopened from coronavirus-induced restrictions.
US November 2021 existing home sales
Highlights
- 6.46m vs 6.52m expected, Prior 6.34m
- Sales change +1.9% vs +0.8% prior
- Supply 2.1 months vs 2.4 month prior
- Median prices $353,900 vs $353,900 prior
- Median prices +13.9% y /y vs +13.1% y/y prior
- Sales were up in the Midwest, the South and in the West while in the Northeast were flat.
- As prices increased in each region, with the highest pace of appreciation in the South region.
via National Association of Realtors
“Determined buyers were able to land housing before mortgage rates rise further in the coming months,” said Lawrence Yun, NAR’s chief economist. “Locking in a constant and firm mortgage payment motivated many consumers who grew weary of escalating rents over the last year.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 3.07 in November, equal to October’s rate. The average commitment rate across all of 2020 was 3.11%.
Median House Prices High
- The pace of price increases well beyond the pace of income gains, which is going to create affordability pressures for prospective buyers along with rising mortgage rates.
- The prices tell the story more than the headline.
- This marks 117 straight months of year-over-year increases, the longest-running streak on record.
“Supply-chain disruptions for building new homes and labor shortages have hindered bringing more inventory to the market,” said Yun. “Therefore, housing prices continue to march higher due to the near record-low supply levels.”
Properties typically remained on the market for 18 days in November, equal to October and down from 21 days in November 2020. Eighty-three percent of homes sold in November 2021 were on the market for less than a month.
First-time buyers were responsible for 26% of sales in November, down from 29% in October and from 32% in November 2020. NAR’s 2021 Profile of Home Buyers and Sellers – released last month4 – reported that the annual share of first-time buyers was 34%.
Individual investors or second-home buyers, who make up many cash sales, purchased 15% of homes in November, down from 17% in October and up from 14% in November 2020. All-cash sales accounted for 24% of transactions in November, equal to October’s percentage, and up from 20% from November 2020.
Distressed sales5 – foreclosures and short sales – represented less than 1% of sales in November, equal to the percentage seen a month prior and equal to November 2020.
Markets seeing the largest year-over-year growth in newly listed homes include:
Milwaukee (+17.4%), Charlotte (+16.1%) and Buffalo (+13.5%). Markets still seeing a decline in newly listed homes compared to last year are Hartford (-20.2%), San Francisco (-19.1%), and San Jose (-16.2%).
Single-family and Condo/Co-op Sales
Single-family home sales rose to a seasonally adjusted annual rate of 5.75 million in November, up 1.6% from 5.66 million in October and down 2.2% from one year ago. The median existing single-family home price was $362,600 in November, up 14.9% from November 2020.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 710,000 units in November, up 4.4% from 680,000 in October and equal to one year ago. The median existing condo price was $283,200 in November, an annual increase of 4.4%.
“As the year comes to an end, NAR is very proud of the work we’ve done to protect homeownership and the valuable investments made in our communities and infrastructure,” said NAR President Leslie Rouda Smith, a Realtor® from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas. “We recognize that further efforts are needed and will continue to promote Fair Housing, work to increase the housing shortage, and fight to dismantle discriminatory housing laws and outdated policies.”
Regional Breakdown
Existing-home sales in the Northeast were flat compared to the prior month, neither climbing or falling in November, and recorded an annual rate of 760,000, which is an 11.6% decrease from November 2020. The median price in the Northeast was $372,500, up 4.7% from one year ago.
Existing-home sales in the Midwest ticked up 0.7% to an annual rate of 1,520,000 in November, a 0.7% drop from a year ago. The median price in the Midwest was $260,100, a 9.0% jump from November 2020.
Existing-home sales in the South grew 2.9% in November, registering an annual rate of 2,850,000, a rise of 1.1% from one year ago. The median price in the South was $318,900, an 18.4% surge from one year prior.
Existing-home sales in the West increased 2.3%, reaching an annual rate of 1,330,000 in November, down 3.6% from one year ago. The median price in the West was $507,200, up 8.4% from November 2020.
The National Association of Realtors® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.
Existing home sales account for 90% of US transactions and are calculated on a contract close basis. New home sales account for the remaining 10% and are based on contract signings.
Existing-home sales 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% of total home sales, are based on a much larger data sample – about 40% of multiple listing service data each month – and typically are not subject to large prior-month revisions.
Source: NAHB
From The TradersCommunity News Desk