| Existing-home sales declined in November while home prices
sustained double-digit annual gains, according to the National Association
of Realtors®.
Total existing-home seasonally adjusted sales – including
single-family, townhomes, condominiums and co-ops – declined by 1.7%
from October to November 2005. Sales were 0.1% below the level in November
2004.
David Lereah, NAR’s chief economist, said higher mortgage interest
rates were responsible for moderating sales, but noted it’s important to
keep an eye on the actual level of home sales given the market surge this
year. “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.”
According to Freddie Mac, the national average commitment rate for a
30-year, conventional, fixed-rate mortgage was 6.33% in November, up from
6.07% in October; the rate was 5.73% in November 2004. Last week, Freddie
Mac reported the 30-year fixed rate eased back to 6.26%.
The national median existing-home price2 for all housing
types was $215,000 in November, up 13.2% from November 2004 when the
median was $190,000. 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 from Vienna, Va., said housing
inventory levels are improving. “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,” said Stevens.
“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% at the end of November to 2.90
million existing homes available for sale, which represents a 5.0-month
supply at the current sales pace.
Single-family home sales were down 1.9% to a seasonally adjusted annual
rate of 6.11 million in November from 6.23 million in October, and were
0.5% 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% higher
than a year ago.
Existing condominium and cooperative housing sales slipped 0.8% 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 2.0% higher than
the 840,000-unit pace in November 2004. The median condo price3
was $225,300, up 10.7% from a year ago.
South: Regionally, total existing-home sales in the South eased
by 0.7% in November to a level of 2.74 million, but were 3.8% higher than
November 2004. The median price in the South was $184,000, up 8.2% from
November 2004.
Midwest: Existing-home sales in the Midwest slipped 1.3% to
annual pace of 1.56 million in November, and were 0.6% below a year ago.
The median price in the Midwest was $170,000, which was 10.4% higher than
November 2004.
Northeast: Total existing-home sales in the Northeast declined
2.7% to an annual sales rate of 1.09 million units in November, and were
4.4% lower than November 2004. The median price in the Northeast was
$250,000, up 9.2% from a year ago.
West: Existing-home sales in the West fell 3.7% to a pace of
1.58 million in November, and were 3.7% below a year ago. The median
existing-home price in the West was $328,000, up 19.3% from November 2004.
1 - The annual rate for a particular month represents what the total
number of actual sales for a year would be if the relative pace for that
month were maintained for 12 consecutive months. Seasonally adjusted
annual rates are used in reporting monthly data to factor out seasonal
variations in resale activity. For example, home sales volume is
normally higher in the summer than in the winter, primarily because of
differences in the weather and family buying patterns.
Existing-home sales, which include single-family, townhomes,
condominiums and co-ops, are based on transaction closings. 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% of total home sales, are based on
a much larger sample – nearly 40% of multiple listing service data
each month – and typically are not subject to large prior-month
revisions.
2 - 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.
3 - Because 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.
Source: National Association Of Realtors
December 29, 2005 |
