Growth in sales of existing homes in the United States for a third consecutive month

(Bloomberg) – US used home sales rose for a third straight month in November, indicating that steady job growth and persistently low mortgage rates are helping to support demand even though stocks remain meager.

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Contract closings rose 1.9% from the previous month to an annualized 6.46 million, the highest pace since January, figures from the National Association of Realtors showed on Wednesday. The median forecast from a Bloomberg survey of economists predicted a rate of 6.53 million.

Data suggests housing demand is picking up, especially in the upper end of the market, as borrowing costs remain well below pre-pandemic levels. Even so, high prices may prevent some potential buyers from entering the market, especially those at the lower end of the income scale, harder hit by a larger inflationary surge.

First-time buyers only represented 26% of transactions in November, up from 32% a year ago and corresponding to the lowest share since 2014, according to the NAR report.

The median selling price of an existing home rose 13.9% from a year ago to $ 353,900 in November, partly reflecting higher sales of high-end properties, according to data from NAR. The inventory of homes priced under $ 500,000 remains tight.

“Determined buyers were able to secure homes before mortgage rates rose further in the coming months,” Lawrence Yun, chief economist of the NAR, said in a statement. Yun said sales this year are expected to reach 6.1 million units, which would be the best since 2006.

“Locking in a constant, firm mortgage payment has motivated many consumers who have grown weary of escalating rents over the past year,” he said.

Housing inventory

There were 1.11 million homes for sale last month, down 13% from the previous year. At the current rate, it would take 2.1 months to sell all the homes available on the market. Real estate agents see any offer of less than five months as a sign of a tight market.

“New ads are coming to the market, but they are quickly picked up,” Yun said on a call with reporters.

Properties were on the market for an average of 18 days in November, up from 21 days in the same month a year ago.

Cash sales accounted for 24% of deals in November, while investors – who make up a large chunk of cash sales – accounted for 15% of November contract signatures.

Dig deeper

  • Previously owned single-family home sales rose 1.6% last month to a $ 5.75 million pace

  • Sales of existing condominiums and co-ops increased 4.4% in November to 710,000

  • Three of four U.S. regions posted increases in November, driven by a 2.9% gain in the South and a 2.3% gain in the West

  • Existing home sales represent approximately 90% of homes in the United States and are calculated at the close of a contract. New home sales, which make up the rest, are based on contract signatures and will be released on Thursday

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