Markets & Economy

Existing-home sales post first annual decline in more than 2 years

Higher mortgage rates, constrained inventories and tight credit slowed pace of sales in November

Higher mortgage rates, constrained inventories and tight credit slowed the pace of existing-home sales for the third month in a row in November, producing the first annual decline in sales in more than two years, the National Association of Realtors (NAR) reported today. Existing-home sales dropped 4.3 percent from October to November, to a seasonally adjusted annual rate of 4.9 million, and were down 1.2 percent from a year ago, marking the first time in 29 months that sales were below year-ago levels. “There is a pent-up demand for both rental and owner-occupied housing as household formation will inevitably burst out, but the bottleneck is in limited housing supply, due to the slow recovery in new-home construction," said NAR Chief Economist Lawrence Yun in a statement. Rents are rising at the fastest pace in five years, Yun said, and annual home prices are rising at the highest rate in eight years. The spike in mortgage rates that occurred in late spring of this year ha...