WASHINGTON (MarketWatch) — Sales of existing homes climbed in November to the highest rate in three years, posting gains in all four regions, a trade group said Thursday.
Existing home sales rose 5.9% in November to a seasonally adjusted annual rate of 5.04 million, reaching the highest rate since November 2009, the National Association of Realtors reported Thursday.
“Momentum continues to build in the housing market from growing jobs and a bursting out of household formation,” said Lawrence Yun, NAR’s chief economist, in a statement.
Economists polled by MarketWatch had expected a rate of 4.9 million for November. The rate in October was revised down to 4.76 million from a prior estimate of 4.79 million. See economic calendar.
Sales are up 14.5% from the prior year. November’s result is the highest in three years, when consumers had expected a home-buyer tax credit to expire. Washington ended up extending the credit’s deadline.
Thursday’s housing data echo other recent positive reports as the market continues to benefit from low rates and prices. A gauge of sentiment among home builders has been on the rise, as is the trend for new construction.
“While we were projecting a recovery in home sales and prices in the second half of the year the pace of gains has exceeded our expectations. In our view the economy is a greater threat to the housing market (given the lack of resolution of the fiscal cliff) than the housing market is to the economy,” analysts at New York-based RDQ Economics wrote in a research note.
However, the housing market still has far to go, and faces substantial headwinds from ongoing high unemployment and strict lending standards, among other factors. First-time buyers, in particular, are seeing their share of home sales decline. According to NAR, first-time buyers made up 30% of purchases in November, compared with 31% in October, and 35% in November 2011.Existing-home sales details
The median existing-home price rose 10.1% from the prior year to $180,600, according to NAR. In part, the price gain reflects more upper-end transactions: Sales of million-dollar-plus homes are up 52% from a year earlier, compared with 17% for homes between $100,000 and $250,000. However, the highest priced homes make up a small portion of overall sales. Low inventory is also playing a role in higher gains.
“Some, but not all of the strengthening in prices merely reflects a shift in the mix away from sales of discounted ‘distressed’ homes -- from foreclosures and short-sales -- toward more traditional sales,” wrote Jim O’Sullivan, chief U.S. economist at Valhalla, NY-based High Frequency Economics.
Elsewhere Thursday, the Federal Housing Finance Agency reported that U.S. house prices rose a seasonally adjusted 0.5% in October, and that prices rose 5.6% from the same period in the prior year.
According to NAR, all regions saw existing-home sales rise in November. Sales were up 7.9% in the South, 7.2% in the Midwest, 6.9% in the Northeast and 0.8% in the West.
Inventories declined 3.8% to 2.03 million units in November, representing at the current sales rate a 4.8-month supply, the lowest since September 2005.
Also Thursday, the U.S. Department of Commerce reported that the U.S. economy grew faster than previously estimated for the July-to-September quarter due to stronger trade, faster health-care spending and increased local government construction.
Gross domestic product in the third quarter grew at a seasonally adjusted annual rate of 3.1%, the fastest rate since growth of 4.1% in the fourth quarter of 2011. Read more about GDP.