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Existing home sales decline for the first time in 5 months as prices rise and supply falls

A home for sale on December 17, 2020 in Scituate, Massachusetts.

Matt Stone | MediaNews Group | Getty Images

After five consecutive months of garners, closed sales of existing homes turned lower in November.

They fell 2.5% on a month-to-month basis to a seasonally adjusted annualized rate of 6.69 million modules, according to the National Association of Realtors. Sales were a strong 25.8% higher from a year earlier. 

While immediately for homes is still high, fueled in part by the stay-at-home culture of the coronavirus pandemic, supply is incredibly low. That is hurting tag sales and affordability.

 “This latest decline could be due to the fact that home prices are rising way fast. It could also be that job the cosmos began to stall in the last couple of months, so consumer confidence was dented,” said Lawrence Yun, chief economist for the society. “No alarm or anything worrisome about the latest monthly decline.”

There were just 1.28 million proficient ins available for sale at the end of November. That is down 22% from a year earlier and represents a  2.3-month purvey at the current sales pace. That’s the lowest inventory count since the Realtors began tracking this metric in 1982. The mass of new listings is actually up about 10% from November 2019, but demand is sucking up that supply quickly.

Adept ins sold at the fastest pace on record, spending an average of just 21 days on the market. Last year, qualified ins were selling in 38 days, which was also considered fast.

The growing imbalance between supply and requested kept home prices rising faster than what might be healthy for the market. The median price of an obtaining home sold in November was $310,800, a 14.6% increase from November 2019.

This measure of the median price is indicative of where mark-downs are most active, which is on the higher end of the market. Sales of homes priced under $100,000 were down 22% from a year earlier. Those prize $100,000 to $250,000 were up just 2%. Sales on the higher end of the market — $750,000 to $1 million — were up 85% from a year ago.

Low mortgage rates are serving fuel demand at every price. The average rate on the 30-year fixed mortgage was slightly over 3% for much of October but then sank in November to the 2% order and hovered around record lows for most of the month. That gave buyers more purchasing power, but also amplified heat to already overheating home prices.

Sales of newly built homes in October, as measured by signed understandings, were a striking 41.5% higher than October 2019, according to the U.S. Census. Builders have been aid from the shortage of existing homes for sale, but they are struggling to keep up with the demand.

Even though December notabilities the traditionally slower season in housing, buyer foot traffic as measured by lock-boxes on the front door of homes for purchase was up 16% from a year ago.

The National Association of Realtors is now predicting total 2020 home sales to total give 5.7 million, the highest level in 14 years.

“Circumstances are far from being back to the pre-pandemic normal,” pronounced Yun. “However, the latest stimulus package and with the vaccine distribution underway, and a very strong demand for homeownership up till prevalent, robust growth is forthcoming for 2021.”  

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