The rate of existing-home sales in November – including single-family, townhomes, condominiums and co-ops – fell 1.7 percent from October 2005 and slid 0.1 percent below the rate in November 2004, the National Association of Realtors trade group reported today.
This seasonally adjusted sales rate stood at 6.97 million units in November, compared to 7.09 in October. The rate is a projection of a monthly sales total over a 12-month period, accounting for seasonal fluctuations in sales activity.
The median existing-home price in November was 13.2 percent higher than in November 2004 but 1.4 percent lower than in October 2005.
David Lereah, NAR’s chief economist, said higher mortgage interest rates were responsible for moderating sales. “The current pace of home sales activity remains historically strong – only eight months have had a higher sales pace,” he said. “A modest downtrend, to a sales volume that is expected to be the second-best year ever in 2006, will be good for the long-term health of the housing sector,” he said.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.33 percent in November, up from 6.07 percent in October; the rate was 5.73 percent in November 2004. Last week, Freddie Mac reported the 30-year fixed rate eased back to 6.26 percent.
The national median existing-home price for all housing types was $215,000 in November, compared with $190,000 in November 2004 and $218,000 in October 2005. The median is a typical market price where half of the homes sold for more and half sold for less.
NAR president Thomas M. Stevens, senior vice president of NRT Inc., said, “As more listings of homes come on the market during this period of modestly declining sales, more home buyers will find themselves in a better position to negotiate. Most home sellers will see excellent returns on their investment, but should understand that double-digit annual increases will become less common in the coming year.”
Total housing inventory levels rose 1.2 percent at the end of November to 2.9 million existing homes available for sale, which represents a 5-month supply at the current sales pace.
Single-family home sales were down 1.9 percent to a seasonally adjusted annual rate of 6.11 million in November from 6.23 million in October, and were 0.5 percent below a 6.14 million-unit pace in November 2004. The median single-family home price was $213,500 in November, which was 13.5 percent higher than a year ago.
Existing condominium and cooperative housing sales slipped 0.8 percent to a seasonally adjusted annual rate of 857,000 units in November from a level of 864,000 in October. Last month’s sales activity was 2 percent higher than the 840,000-unit pace in November 2004. The median condo price was $225,300, up 10.7 percent from a year ago.
Regionally, total existing-home sales in the South fell 0.7 percent in November to a level of 2.74 million and were 3.8 percent higher than November 2004. The median price in the South was $184,000, up 8.2 percent from November 2004.
Existing-home sales in the Midwest slipped 1.3 percent to an annual pace of 1.56 million in November, and were 0.6 percent below a year ago. The median price in the Midwest was $170,000, which was 10.4 percent higher than November 2004, the association reported.
Total existing-home sales in the Northeast declined 2.7 percent to an annual sales rate of 1.09 million units in November, and were 4.4 percent lower than November 2004. The median price in the Northeast was $250,000, up 9.2 percent from a year ago.
Existing-home sales in the West fell 3.7 percent to a pace of 1.58 million in November, and were 3.7 percent below a year ago. The median existing-home price in the West was $328,000, up 19.3 percent from November 2004.
Existing-home sales are based on transaction closings, the trade group reported. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample – nearly 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.
The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns, the association also noted.
Since there is a concentration of condos in high-cost metro areas, the national median condo price is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes, according to the association.
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