Existing Home Sales Slip in November

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • The pace of existing home sales – closed sales – FELL 1.7 percent, 90,000, in November to a seasonally adjusted annual sales rate of 5.35 million;
  • Sales pace for October was revised DOWN 20,000 to 5.44 million;
  • Median price of an existing single-family home ROSE 0.1 percent, $300, to $271,300;
  • Year-year the median price is up 5.4 percent or $13,900;
  • Number of homes available for sale DECLINED 130,000 to 1.64 million;
  • The months’ supply of homes for sale in November FELL to 3.7 months from 3.9 months.

Trends:

  • Year-year sales were UP 2.7 percent, the fifth consecutive month of year-to-year increases after 16 months of year-year declines;
  • The median price of an existing single-family home ROSE for the first time in five months;
  • The inventory of homes for sale fell for the fifth straight month, the longest stretch of monthly declines since the number of homes for sale fell for six straight months from July through December last year.

Data Source: National Association of Realtors (NAR)

Image result for existing home sales

Despite near record low mortgage rates and stable prices, existing home sales slipped 1.7 percent in November, underscoring a difficult year for existing home sales.

The dip in home prices has trimmed prices of existing homes leading many would-be sellers to take their homes off the market, reducing choices for buyers, trimming the average sales pace to 5.36 million in the first 11 months of 2018 to 5.23 in the first 11 months this year.

The number of homes for sale shrank to 1.64 million in November, the lowest level since 1.63 million in February which was followed in March by a 4.9 percent drop in sales. The 130,000 drop in the inventory of homes for sale was the largest single-month decline since last December when the number of homes on the market fell 210,000.

As if to replace the shrinking inventory of existing homes for sale, the number of permits and starts for single-family homes increased in November, the government reported earlier this week. And, with the increase in homebuilding, the housing market, reflecting builder sentiment, rose sharply in December.

Homebuilding – that is new homes sold – represents about 10 percent of the home sales market but has a disproportionate impact on the economy, reflecting as it does construction labor, and the purchase of building material and supplies.

Also, according to the National Association of Home Builders, the buyer of a new home spends an average of $9,500 on furnishing during the first year of homeownership compared with $6,500 spent by the buyer of an existing home.

The decline in existing home sales came despite two straight months – August and September –in which the NAR’s pending home sales index (reflecting contracts for sale) rose. The pending home sales index fell on October suggesting another dip in sales (closings) in December.

Hear Mark Lieberman every Friday, on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124, at 6:20 am Eastern Time. You can follow Mark Lieberman on Twitter at @foxeconomics.

0 Responses to “Existing Home Sales Slip in November”


Comments are currently closed.