Existing Home Sales Rose In November

Despite the fact that it has been forced to revise downward four years of home sales figures, the National Association of Realtors (NAR) says the housing market continues to improve, albeit slowly.

In its report for November, NAR says sales of existing homes rose from October's pace and remains above the level of November 2010. Completed sales were up 4.0 percent over October and were 12.2 percent higher than 12 months ago.

10 month high

“Sales reached the highest mark in 10 months and are 34 percent above the cyclical low point in mid-2010 – a genuine sustained sales recovery appears to be developing,” said Lawrence Yun, NAR's chief economist. “We’ve seen healthy gains in contract activity, so it looks like more people are realizing the great opportunity that exists in today’s market for buyers with long-term plans.”

In conjunction with the November report, NAR also released enchmark revisions with downward adjustments to sales and inventory data since 2007, led by a decline in for-sale-by-owners.

Although rebenchmarking resulted in lower adjustments to several years of home sales data, the month-to-month characterization of market conditions did not change," the trade group said. There are no changes to home prices or month’s supply.

NAR says many more people tried to buy homes than actually closed in November. Once again, the contract failure rate was around 33 percent. In many instances, would-be buyers failed to qualify for financing or the appraisal on the home did not meet the lender's requirements.

Demand rising

Despite the difficulty in obtaining financing, Realtors say there is increasing desire among consumers to buy homes. Interest rates are low and distressed properties still present bargains. At the same time, rents continue to climb.

Another encouraging sign is total housing inventory at the end of November fell 5.8 percent to 2.58 million existing homes available for sale, which represents a 7.0-month supply at the current sales pace, down from a 7.7-month supply in October.

“Since setting a record of 4.04 million in July 2007, inventories have trended down and supplies are moving close to price stabilization levels,” Yun said.

The national median existing-home price for all housing types was $164,200 in November, down 3.5 percent from a year ago. Distressed homes – foreclosures and short sales typically sold at deep discounts – accounted for 29 percent of sales in November, compared with 28 percent in October and 33 percent in November 2010.

All-cash sales accounted for 28 percent of purchases in November; they were 29 percent in October and 31 percent in November 2010. Investors make up the bulk of cash transactions.