Existing-home sales posted an annual rate of 4.93 million in November, down 6.1% compared to a downwardly revised 5.25 million in October, according to the National Association of Realtors (NAR).
Although November is historically a slow month for existing-home sales, NAR points out that tight inventory, rising home prices and a slight slowdown in investor activity are factors that are slowing overall sales activity.
‘Fewer people bought homes last month despite interest rates being at their lowest levels of the year,’ says Lawrence Yun, chief economist for NAR, in a release. ‘The stock market swings in October may have impacted some consumers' psyches and, therefore, led to fewer November closings. Furthermore, rising home values are causing more investors to retreat from the market.’
Total housing inventory at the end of November fell 6.7% to 2.09 million existing homes, a 5.1-month supply at the current sales pace.
‘Lagging home-building activity continues to hamstring overall housing supply and is still too low in relation to this year's promising job growth,’ says Yun. ‘Much faster price and rent appreciation – easily exceeding wage growth – will occur next year unless new construction picks up measurably.’
Despite the tight supply, unsold inventory remains 2.0% higher than a year ago, when there were 2.05 million existing homes available for sale, according to NAR.
The median existing-home price for all housing types in November was $205,300, up 5.0% compared to November 2013.
Despite the month-over-month decline, existing-home sales were up 2.1% compared to November 2013.
About 25% of all transactions in November were all-cash sales, according to NAR, down from 27% in October and down from 32% in November of last year.
Individual investors accounted for about 15% of existing-home sales in November, unchanged from the previous month and down 19% compared to November 2013. About 61% of investors paid cash in November.
One bright spot in the report: First-time buyers represented about 31% of all sales in November – up from 29% in October to reach the highest share since October 2012.