The headlines for existing home sales improved and say “a big surge in the Northeast and a smaller gain in the South pushed existing-home sales up in November for the third consecutive month“. Our analysis of the unadjusted data agrees – and the quantity of home sales this month are nearly back to pre-Great Recession levels.
Analyst Opinion of Existing Home Sales
This was a great month for existing home sales. I think this surge was do to anticipation of higher mortgage interest rates and not a harbinger for future elevated sales. Still, it is good news for home sellers.
Econintersect Analysis
- Unadjusted sales rate of growth accelerated 18.0 % month-over-month, up 18.2 % year-over-year – sales growth rate trend significantly improved using the 3 month moving average.
- Unadjusted price rate of growth accelerated 0.1 % month-over-month, up 4.9 % year-over-year – price growth rate trend improved using the 3 month moving average.
- The homes for sale inventory significantly declined this month, and remains historically low for Novembers, and is down 9.3 % from inventory levels one year ago).
NAR reported:
- Sales up 0.7 % month-over-month, up 15.4 % year-over-year.
- Prices up 6.8 % year-over-year
- The market expected annualized sales volumes of 5.400 M to 5.650 million (consensus 5.350 million) vs the 5.61 million reported.
Unadjusted Year-over-Year Change in Existing Home Sales Volumes (blue line) – 3 Month Rolling Average (red line)
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The graph below presents unadjusted home sales volumes.
Unadjusted Monthly Home Sales Volumes
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Here are the headline words from the NAR analysts:
Lawrence Yun, NAR chief economist, says it’s been an outstanding three-month stretch for the housing market as 2016 nears the finish line. “The healthiest job market since the Great Recession and the anticipation of some buyers to close on a home before mortgage rates accurately rose from their historically low level have combined to drive sales higher in recent months,” he said. “Furthermore, it’s no coincidence that home shoppers in the Northeast — where price growth has been tame all year — had the most success last month.”
“Existing housing supply at the beginning of the year was inadequate and is now even worse heading into 2017,” added Yun. “Rental units are also seeing this shortage. As a result, both home prices and rents continue to far outstrip incomes in much of the country.”
First-time buyers in higher priced cities will be most affected by rising prices and mortgage rates next year and will likely have to stretch their budget or make compromises on home size, price or location,” said Yun.
NAR President William E. Brown says consumers looking to buy in 2017 should find a Realtor®, seek a preapproval from a lender and start their home search now. “It’s never too early to begin viewing listings online and in person with a Realtor® to identify what’s available within the budget and where,” said Brown. “There are fewer available homes during the winter months but also fewer buyers. With mortgage rates and prices expected to increase as the year goes on, the first few months of 2017 could be an opportune time close on a home.”
