Big gain for existing-home sales

Existing-home sales rose 7.4% to a seasonally adjusted annual rate of 6.54 million units for November, according to a report released today by the National Association of Realtors (NAR).

The figure is 44.1% higher than the 4.54 million-unit pace from November last year and shows existing-home sales are at the highest level since February 2007 when they hit 6.55 million.

The NAR’s chief economist, Lawrence Yun, said that the rise was expected.

“This clearly is a rush of first-time buyers not wanting to miss out on the tax credit, but there are many more potential buyers who can enter the market in the months ahead,” he said. “We expect a temporary sales drop while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit, which hopefully will take us into a self-sustaining market in the second half of 2010. In all, 4.4 million households are expected to claim the tax credit before it expires, and balance should be restored to the housing sector with inventories continuing to decline.”

The NAR also reported the national median existing-home price for all housing types was down 4.3% from November 2008 to $172,600. The price was up slightly over October's average of $172,200.

The total housing inventory fell 1.3% to 3.52 million existing homes available for sale. That figure represents a 6.5-month supply at the current sales pace, down from a 7-month supply in October. Raw unsold inventory is down 15.5% from last year, representing the lowest supply of homes on the market since April 2006 when it was at a 6.1-month supply.

“Nearly all markets experienced a solid sales gain from one year ago,” Yun said. “The only markets with measurably lower sales were in San Diego, Riverside and Sacramento, where inventory shortages for lower priced homes are limiting sales.”

Regionally, existing-home sales in the Northeast rose 6.6% in November to an annual level of 1.13 million, up 52.7% from last year. Sales in the Midwest rose 8.4% to 1.55 million, up 53.5% from last year. In the South, sales rose 4.8% to 2.39 million, up 44.8 % from last year, and the West saw sales up 10.6% to 1.46 million, up 4.1% from November 2008.