Existing-home sales moved higher for the third straight month in November and reached their strongest pace in almost 11 years, while new construction of single family homes surged to a 10-year high, according to two new reports.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums, and co-ops, jumped 5.6% to a seasonally adjusted annual rate of 5.81 million in November from an upwardly revised 5.5 million level in October, according to the National Association of Realtors.
After last month’s increase, sales are 3.8% higher than a year ago and are at their strongest pace since December 2006.
Lawrence Yun, NAR chief economist, said home sales in most of the country expanded at a tremendous clip in November.
“Faster economic growth in recent quarters, the booming stock market and continuous job gains are fueling substantial demand for buying a home as 2017 comes to an end,” he said. “As evidenced by a subdued level of first-time buyers and increased share of cash buyers, move-up buyers with considerable down payments and those with cash made up a bulk of the sales activity last month.”
The median existing-home price for all housing types in November was $248,000, up 5.8% from November 2016. November’s price increase marks the 69th straight month of year-over-year gains with Yun noting that price appreciation is happening too fast in a lot of markets.
Single-family home sales grew 4.5% to a seasonally adjusted annual rate of 5.09 million in November and are now 3.2% above the pace from a year ago. Existing condominium and co-op sales increased 14.3% and are now 7.5% above the same time in 2016.
Housing Starts Best since 2007
Meantime, a separate report showed nationwide housing starts rose 3.3% in November to a seasonally adjusted annual rate of 1.297 million units after a downwardly revised October reading, according the Commerce Department. This latest reading is the best in just over 10 years.
Single-family production rose 5.3% in November to a seasonally adjusted annual rate of 930,000, which also is the highest post-recession level. Year to date, single-family starts are 8.7% above their level over the same period last year. Meanwhile, multifamily starts fell 1.6% to 367,000 units after a strong October reading.
“The increase in single-family production is consistent with builder confidence gains, and shows builders are optimistic about new federal policies aimed to promote small business growth,” said Granger MacDonald, chairman of the National Association of Home Builders (NAHB).
Regionally in November, combined single- and multifamily housing production rose 19% in the West and 11.1% in the South. Starts fell 12.9% in the Midwest and 39.6% in the Northeast.
“The strong November reading indicates that builders are continuing to increase single-family production to meet growing demand for housing,” said NAHB Chief Economist Robert Dietz. “With low unemployment and increasing owner-occupied household formation, single-family starts should continue to make gains in 2018.”
Overall permit issuance, an indicator of future building levels, declined 1.4% in November to a seasonally adjusted annual rate of 1.298 million units. Single-family permits rose 1.4% to 862,000 units, the highest level since August 2007, while multifamily permits fell 6.4% to 436,000.
CNBC reported the jump in groundbreaking on single-family housing units suggests housing could contribute positively to the gross domestic product in the fourth quarter. A recent survey showed confidence among homebuilders soaring to near an 18 and a half-year high in December, due to optimism over buyer traffic and sales over the next six months.