November existing home sales jumped to a level not seen since December 2006, despite the continued lack of inventory. Given the increase in sales and the low supply, it’s not surprising that median prices continued to rise, extending the streak of year-over-year price increases. Homes stayed on the market slightly longer than in October, but days on the market were still lower than the previous November. Buyers are out there looking for homes. Will more sellers come to the table in the coming months to ease the lack of supply? Will we see an increase in new construction?
November existing home sales rose by 5.6 percent compared to October, and were 3.8 percent higher than November 2016, according to the National Association of Realtors (NAR) November Existing Home Sales Report, released December 20th. It was the strongest sales month since December 2006.
Inventory fell yet again from October to November, dropping 7.2 percent. It is now 9.7 percent lower year-over-year, and it has fallen for 30 months in a row. The supply of unsold inventory was 3.4 months, down from 4.0 months in November 2016.
Stressing the need for more inventory in lower price ranges, NAR chief economist Lawrence Yun commented, “The elevated presence of investors paying in cash continues to add a layer of frustration to the supply and affordability headwinds aspiring first-time buyers are experiencing.” He continued by saying, “The healthy labor market and higher wage gains are expected to further strengthen buyer demand from young adults next year. Their prospects for becoming homeowners will only improve if more lower-priced and smaller-sized homes come onto the market.”
Home prices continued their year-over-year increase. The median price of existing homes sold in November was $248,000, up 5.8 percent from November 2016 ($234,400), marking 69 consecutive months of year-over-year gains.
Days on the market (DOM) rose to 40 from October’s 34, but this is still a faster sales pace than November 2016, when homes typically stayed on the market for 43 days.
All was not equal across the November housing market. An increase in investor purchases is affecting the supply of more affordable homes for first-time homebuyers. Buyers looking in higher price ranges found more homes to choose from than buyers in lower price ranges. Running counter to the increase in sales overall, the West saw a 2.3 percent drop in sales, although prices grew by 8.2 percent year-over-year and certain metro markets are still red hot.
Are the holidays a bad time to put your house on the market or look for a home to buy? Not necessarily. If you’re a seller, low inventory means less competition. If you’re a buyer, be prepared. Get together with a First Choice Loan Services Inc. loan originator. If you haven’t started looking for a home yet, this is the perfect time to explore your home loan options, find out how much loan you may qualify for, and decide what loan program best suits your unique financial needs and goals. When you’re ready to make an offer on the home you want, you can be confident that your offer is stronger with a First Choice Loan Services prequalification, pre-underwriting approval, or preapproval.