Existing Home Sales Gain In November – December 20, 2012
Another day, another uplifting metric issued by the housing sector. Specifically, after the Commerce Department had led off the news parade for the month of November yesterday morning with data showing that housing starts had come in at their second best level of the year last month, although easing nominally from October, and building permits, a more forward-looking statistic, had hit a four-year high, the National Association of Realtors, a trade group, has now issued data showing that sales of existing homes ticked up in November, passing the annualized rate of five million.
Specifically, the data showed that such activity came in at 5.04 million units last month, even though Hurricane Sandy's aftermath possibly delayed some closings. That figure exceeded expectations of 4.90 million homes sold and surpassed the October figure of 4.76 million units. (The October sales tally was revised lower from an initially estimated 4.79 million residences sold annually.)
Moreover, the November tally was also 14.5% above the year-earlier total and represented the highest rate for such sales activity since November of 2009. The latest figure also represented the 17th consecutive month in which sales were up on a year-to-year basis.
Lawrence Yun, the real estate trade group's chief economist, said that the market for resales has been strongest at the upper end of the spectrum, with closings on homes costing more than $750,000 rising by better than 50% from a year earlier. Such high-end homes often are bought for cash, or purchased by buyers whose credit credentials are well above average and thus mortgages are more easily obtainable by these buyers. By contrast, sales of homes costing less than $100,000 were down 4% from a year earlier.
Meantime, the accelerating volume pace means that there are fewer homes now for sale, and that lessened availability is putting upward pressure on housing prices. Indeed, the average price for a home sold in November was $180,600. That was up more than 10% from the prior year's $164,000.
Finally, this report, along with the solid construction numbers issued yesterday, suggest that housing, which had led the nation into recession in 2008, is now helping to lead the recovery charge. Indeed, this morning's report on revised third-quarter GDP growth, which showed a 3.1% advance, included data indicating that housing had boosted growth for the period by 0.31%--a major contribution, by any gauge. We expect housing to continue its formidable recovery in 2013.