Existing home sales grew 5.6% to a seasonally adjusted 5.81 million-unit rate in November from a revised 5.50 million sales pace the previous month, first reported as 5.48 million, the National Association of Realtors announced Wednesday.
The November rate represents the strongest pace since 6.42 million sales in December 2006, and is a 3.8% increase from the same month a year ago. The number was above the median 5.53 million unit pace predicted by economists polled by IFR Markets.
“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,” said NAR chief economist Lawrence Yun. “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 odds of closing on a home are much better at the upper end of the market, where inventory conditions continue to be markedly better.”
Sales in the regions were mostly up in November. They were up 6.7% in the Northeast, 8.3% in the South, and 8.4% in the Midwest. Sales fell 2.3% in the West.
The median sales price was $248,000 in November, up from $246,000 in October, and up 5.8% from a year ago.
Inventory levels dropped 7.2% from the previous month to 1.67 million existing homes, representing a 3.4-month supply at the current pace. Inventory was down 9.7% from the November 2016 level.
“The anticipated rise in mortgage rates next year could further cut into affordability if these staggeringly low supply levels persist,” said Yun. “Price appreciation is too fast in a lot of markets right now. The increase in homebuilder optimism must translate to significantly more new construction in 2018 to help ease these acute inventory shortages.”