Sales of existing homes reached record levels in November, increasing 2.7 percent since October. Existing-home sales were at a seasonally adjusted annual rate of 6.94 million units in November, up from 6.76 million units in October, the National Association of Realtors announced today.
The seasonally adjusted annual rate projects a monthly sales total over a 12-month period. The previous record was 6.92 million, set in June 2004. November sales activity was 13.2 percent above the 6.13-million-unit level in November 2003.
David Lereah, chief economist for the association, said the boost in sales is due in large part to continuing low interest rates. “Mortgage interest rates dropped a quarter of a percentage point in late summer and then stabilized,” he said. “Coupled with a growing labor market and a rising economy, this created optimal conditions for the housing sector.”
He added, “Our forecast for the housing market is for a continuation of strong home sales, although down a little from the record-setting pace of 2004. We think slower sales will help to create a better balance between home buyers and sellers, but with tight inventories of homes available for sale, price appreciation hasn’t slowed yet.”
The national median existing-home price was $188,200 in November, up 10.4 percent from November 2003 when the median price was $170,500, and up from a median price of $187,000 in October. The median is a typical market price where half of the homes sold for more and half sold for less.
Housing inventory levels at the end of November rose 2.1 percent from October to a total of 2.48 million existing homes available for sale, which represents a 4.3-month supply at the current sales pace.
Al Mansell, association president and CEO of Coldwell Banker Residential Brokerage in Salt Lake City, said, “Although mortgage interest rates should rise modestly over the course of the next year, they’ll stay low enough to preserve favorable market conditions,” he said.
“Low interest rates are helping new buyers to enter the market. This growth in homeownership is stimulating all steps of the housing ladder by creating a ready market for existing owners wishing to make a trade, and underscores the value of housing as an investment.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.73 percent in November, almost unchanged from 5.72 percent in October; it was 5.93 percent in November 2003.
Regionally, existing-home sales in the Northeast dropped 1.3 percent in November to a pace of 740,000 units, but were 4.2 percent higher than a year ago. The median existing-home price in the Northeast was $226,700, up 17.3 percent from November 2003.
Existing-home sales in the West jumped 6.5 percent to a record annual rate of 1.97 million units in November, and were 16.6 percent higher than November 2003. The median existing-home price in the West was $274,000, up 13.3 percent from the same month a year earlier.
The home resale pace in the South rose 1.8 percent in November to a record level of 2.83 million units, and was 15.5 percent above a year ago. The median price of an existing home in the South was $170,000, which was 10.1 percent higher than November 2003.
Existing-home sales in the Midwest increased 0.7 percent in November to an annual rate of 1.39 million units, and were 9.4 percent above November 2003. The median price in the Midwest was $151,200, up 6.6 percent from the same month a year earlier.
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