The National Association of Realtors is reporting that existing-home sales rose again in November and remain above one year ago.
The latest monthly data shows total existing-home sales—which are completed transactions that include single-family, townhomes, condominiums and co-ops—increased 4% to a seasonally adjusted annual rate of 4.42 million in November, and are 12.2% above the 3.94 million-unit pace in November 2010.
Lawrence Yun, NAR chief economist, said more people are taking advantage of the buyer’s market. “Sales reached the highest mark in 10 months and are 34% above the cyclical low point in mid-2010—a genuine sustained sales recovery appears to be developing,” he said. “We’ve seen healthy gains in contract activity, so it looks like more people are realizing the great opportunity that exists in today’s market for buyers with long-term plans.”
Housing affordable for average family, but restrictions hurting. NAR President Moe Veissi, broker-owner of Veissi & Associates Inc. in Miami, said housing affordability conditions have set a new record high. “With record-low mortgage interest rates and bargain home prices, NAR’s housing affordability index shows that a median-income family can easily afford a median-priced home,” he said. “With consumer price inflation rising by more than 3% this year, consumers are looking to lock-in steady payments by taking out long-term fixed-rate mortgages. However, the problem remains that some financially qualified families who are willing to stay well within their means are being denied the opportunity to buy in today’s market by the overly restrictive mortgage underwriting situation,” Veissi said.
An elevated level of contract failures continues to hold back a broader sales recovery. Contract failures were reported by 33% of NAR members in November, unchanged from October but notably above a year ago when it was 9%. Contract failures are cancellations caused by declined mortgage applications, failures in loan underwriting from appraised values coming in below the negotiated price, or other problems including lower conforming mortgage loan limits, home inspections and employment losses.