Existing Home Sales Lose Momentum in November as Inventory Slightly Tightens

Home sales were choppy throughout the country in November as housing inventory began its seasonal decline, said NATIONAL ASSOCIATION OF REALTORS® Chief Economist Lawrence Yun.

“Fewer people bought homes last month despite interest rates being at their lowest levels of the year,” Yun said. “The stock market swings in October may have affected some consumers’ psyche and therefore led to fewer November closings. Furthermore, rising home values are causing more investors to retreat from the market.”

After hitting their highest level of the year, existing home sales slid in November as housing supply showed some tightening, according to NAR data. All four regions of the country posted declines in sales in November.

The number of existing single-family homes, townhomes, condominiums, and co-ops that sold fell 6.1%, dropping to their lowest annual sales pace since last May. However, homes are still selling 2.1% faster than they did at this point in 2013.

Although homes were selling more slowly, the median price at which they sold rose in November, reaching $205,300, up 5.0% from November 2013.

The median existing single-family home price was $206,200 in November, up 5.6% from November 2013.

The median existing condo price was $199,000 in November, which is 1.2% higher than a year ago.

Sellers’ Market

Nationally, homesellers had a slight advantage over buyers in November. At the November sales pace, there was a 5.1-month supply of homes for sale. Markets are considered balanced where it would take six months to sell the current supply of homes for sale.

“Lagging homebuilding activity continues to hamstring overall housing supply and is still too low in relation to this year’s promising job growth,” Yun said. “Much faster price and rent appreciation — easily exceeding wage growth — will occur next year unless new construction picks up measurably.”

Who’s Buying?

First-time homebuyers purchased 31% of the homes sold in November, up from 29% in October.

First-time buyers may find it easier to buy in 2015 thanks to new low downpayment mortgage programs from Fannie Mae and Freddie Mac, said NAR President Chris Polychron. The new programs let first-timers who have solid credit and verifiable income get a mortgage to buy a home with just 3% down.

Distressed sales — foreclosures and short sales — held steady at 9% of all sales. Foreclosures sold for an average discount of 17% below market value in November, while short sales were discounted 13%.

Time on Market

Home Type Median Number of Days on Market
All homes 65
Short sales 116
Foreclosures 65
Non-distressed 63

November 2014 Regional Existing Home Sales

  Sales Volume Compared with Oct. 2014 Nov. 2014 Median Price Median Price Compared with Nov. 2013
Northeast Down 4.2% $246,100 Up 1.3%
Midwest Down 8.9% $160,500 Up 7.0%
South Down 3.2% $176,500 Up 5.2%
West Down 9.6% $292,700 Up 3.5%