First time in 29 months that we see a decline in annual existing home sales
November was the first time in 29 months that we saw a decline in home sales both on a monthly and annual basis. The National Association of Realtors (NAR) calculated a drop to 4.9 million existing homes last month on an annualized basis, from 5.1 million in October 2013 and 5.0 million in November 2012. This figure includes completed sales from town homes, condominiums, co-ops and single-family homes.
NAR’s chief economist said the total of home sales was hurt by higher mortgage rates, constrained inventory, and the continuation of tight credit.
Slower sale rates in November brought the monthly supply of existing homes up from 4.9 months in October 2013 to 5.1 months in November 2013. However, inventory levels remain well below average and the lower amount of inventory was one of the factors causing the median existing-home price to rise in November. The median price in November 2013 was up 9.4 percent year-over-year to a level of $196,300. However, when compared to October 2013, the median price was down 1.6 percent.
Starting January 10, 2014, new underwriting regulations are expected to impact some borrowers, which might further slow sales. Realtors are hoping that regulators will make adjustments if the new standards turn out to be too strict.