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Home sales in the United States have fallen to their lowest annual pace for six months, down 6.1% in November, according to the latest data from the National Association of Realtors. Total sales, excluding new build, reached a seasonally adjusted annual rate of 4.93 million in November from a downwardly revised 5.25 million in October but they are still up 2.1% compared to a year ago. Lawrence Yun, NAR chief economist, says sales activity was choppy throughout the country in November and housing inventory began its seasonal decline. ‘Fewer people bought homes last month despite interest rates being at their lowest levels of the year,’ he pointed out. ‘The stock market swings in October may have impacted some consumers’ psyches and therefore led to fewer November closings. Furthermore, rising home values are causing more investors to retreat from the market,’ he added. But prices are still strong. The median existing home price for all housing types in November was $205,300, 5% above November 2013 and the 33rd consecutive month of year on year price gains. The NAR data also shows that total housing inventory at the end of November fell 6.7% to 2.09 million existing homes available for sale, which represents a 5.1 month supply at the current sales pace, unchanged from last month. Despite the tightening in supply, unsold inventory remains 2% higher than a year ago, when there were 2.05 million existing homes available for sale. ‘Lagging home building activity continues to hamstring overall housing supply and is still too low in relation to this year’s promising job growth. Much faster price and rent appreciation, easily exceeding wage growth, will occur next year unless new construction picks up measurably,’ said Yun. All cash sales were 25% of transactions in November, down from 27% in October and below the 32% recorded in November of last year. Individual investors, who account for many cash sales, purchased 15% of homes in November, unchanged from last month and below November 2013 when it was 19% while 61% of investors paid cash in November. The percent share of first time buyers in November climbed to 31% from 29% in October, the highest share since October 2012 when it was also 31%. First time buyers have represented an average of 29% this year. Distressed sales, that is foreclosures and short sales, were unchanged in November from 9% in October and remained in the single digits for the fourth month this year, well below the 14% of a year ago. Overall 6% of November sales were foreclosures and 3% were short sales. The data shows that foreclosures sold for an average discount of 17% below market value in November compared with 15% in October, while short sales were discounted 13% compared to 10% in October. Properties typically stayed on the market in November for 65 days, slightly longer than the 63 days recorded in October and above the 56 days of… Continue reading →
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