Summary
- • Existing home sales fell 1.7% in November (seasonally adjusted annualized rate). A total of 6.97 million units exchanged hands during the month (single family plus condos and coops), which is the lowest sales pace since March.
- • Despite the decelerating sales trend, home prices continued to show strength. The median price rose 13.2% from a year ago period. The national median home price stood at $215,000.
- • The price gain was the strongest in the West, where price rose by 19%. The South region recorded slowest growth with 8% appreciation.
- • The inventory of homes for sale rose to 2.90 million. That is roughly 400,000 more homes on the market compared to one year ago. Consequently, the months supply of inventory based on the current sales pace rose to 5.0 months. The rising supply will undoubtedly mean a retreat in price growth to a more sustainable single-digit pace by the spring of 2006.
- • The average mortgages rate in November of 6.3% is 50 basis points higher than what had prevailed for most of 2005 and 2006. Higher rates are cutting into affordability and hence housing demand. Rates are further expected to inch higher in 2006.
- • Even with modestly higher rates home prices are in no danger of falling. Nationally, prices are projected to rise by 6% in 2006, which translates into about $12,000 housing equity gains for a typical homeowner in the U.S.
Source: National Association of Realtors By Kevin Thorpe, NAR Research
Next report on Existing Homes Sales due 1/25/06
Happy New Year!
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