After hitting their highest level of the year during October existing-home sales slid in November, according to figures released Monday by the National Association of Realtors
Total existing-home sales fell 6.1% to a seasonally adjusted annual rate of 4.93 million in November from a downwardly revised 5.25 million in October. Sales dropped to their lowest annual pace since May at 4.91 million, but are 2.1% above year-over-year levels for the second straight month.
Lawrence Yun, NAR chief economist, said 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 said. “The stock market swings in October may have impacted some consumers’ psyche and therefore led to fewer November closings. Furthermore, rising home values are causing more investors to retreat from the market.”
According to Yun lagging homebuilding 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,” he said.
Single-family home sales dropped 6.3%, to a seasonally adjusted annual rate of 4.33 million in November, but is 2.4% above the pace a year ago. Existing condominium and co-op sales declined 4.8% to a seasonally adjusted annual rate of 600,000 units in November and are unchanged from a year ago.
November existing-home sales in the Northeast declined 4.2% but are still 4.6% above a year ago, while in the Midwest, existing-home sales fell 8.9% and are now 1.7% below November 2013. Existing-home sales in the South decreased 3.2% but remain 5% above November 2013 while sales in the West dropped 9.6% and remain 1% below a year ago.