Existing home sales increased 4.4% to a seasonally adjusted annual rate of 5.22 million units in November from an upwardly revised pace of 5 million units in October. Last month’s sales activity was 1.4% above the 5.15-million unit pace in November 1999.
“Mortgage interest rates have dropped three-quarters of a percentage point since peaking in May, which is keeping sales strong in the closing months of the year,” said Dr. David Lereah, NAR’s chief economist. “We expect a total of 5.01 million existing-home sales this year, making it the second strongest on record.”
According to Freddie Mac, the national average commitment rate for a 30- year, conventional, fixed-rate mortgage was 7.75% in November, down from 7.80% in October. It was 7.74% in November 1999.
“At this time of the year, we see higher ratios of first-time home buyers, especially singles and childless couples entering the market, and these are the people who benefit the most from lower interest rates,” said NAR President Richard A. Mendenhall. “In turn, this allows people to sell their existing homes and trade up to larger properties, which is why the market is doing so well.”
Housing inventory levels fell 13.4% at the end of November with 1.55 million existing homes available for sale, which represents a 3.6-month supply at the current sales pace. Inventory levels remain 13.9% below the 1.80 million homes available in November 1999.
The national median existing-home price was $139,900 in November, up 5% from November 1999 when the median price was $133,200. The median is the midpoint -- half the homes sell for less, while half sell for more.
Regionally, existing-home sales in the Northeast rose 10% from October to a pace of 660,000 units in November. That rate was 6.5% greater than November 1999. The median existing-home price in the Northeast was $143,200, up 5.1% from a year ago.
In the Midwest, existing homes were selling at an annual rate of 1.16 million units in November, up 8.4% from October. The pace was 0.9% below November 1999. The median price in the Midwest was $118,500, down 0.4% from November 1999. “The drop in the Midwestern median home price looks more like an inventory problem with higher-end homes, coupled with a seasonal shift to lower-priced homes being sold at this time of year,” Lereah said.
In the West, home re-sales rose 6% in November to an annual rate of 1.41 million units. The pace was 2.2% better than November 1999. The median existing-home price in the West was $188,900, up% 7.8 from the same month a year earlier.
The existing-home sales pace in the South slipped 0.5% in November to an annual rate of 1.99 million units. However, they were 0.5% better than November 1999. The median price of an existing home in the South was $130,100, which was 7.5% higher than a year ago.