Existing Home Sales Rise Less Than Expected In November

31 Dec 2014 | Author: | No comments yet »

Pending Home Sales Up In November For Third Straight Month, Says NAR.

Signed contracts for previously owned homes rose slightly in November, suggesting that the sluggish housing market strengthened a bit near year’s end. “The consistent economic growth and steady hiring we’ve seen the second half of this year is giving buyers enough assurance to consider purchasing a home before year’s end,” said the Realtors’ chief economist, Lawrence Yun.

The number of contracts signed to buy previously-owned homes ticked up in November to hit a higher level than the previous year for the third straight month, the National Association of Realtors said Wednesday. Until then, contract signings had been down on a year-over-year basis since September 2013, when rapidly rising prices appeared to slow the pace at which Americans were purchasing homes. After a two-year rebound, housing demand faltered in the middle of 2013 amid inventory shortages, rising prices and a sudden increase in mortgage rates.

Yun indicated that falling gas prices will also help consumers save for a down payment and also boost sales, as will the opportunity to put down less money on a home. A reading of 100 corresponds to the average level of contract activity in 2001, or “historically healthy” home-buying traffic, according to the NAR. A NAR survey released last month showing that median down payments ranged from 6% for first-time homebuyers to 13% for repeat buyers. “There’s still misperception out there that a much higher down payment is needed, while that’s not the reality,” Yun says. Pending sales reached their highest level in the South since July 2013, and the seasonally adjusted index for that region has been higher in only three other months since the housing bust began in 2007.

Economists consider NAR’s pending home sales report a more timely housing market indicator than others because it is based on contracts signed rather than closed transactions. The new home sales in November were down by 1.6 percent to a seasonally adjusted annual rate of 438,000, according to Commerce Department report last week.

The average rate on the 30-year fixed mortgage for the week ended Wednesday stood at 3.87%, near its lowest level of 2014, according to Freddie Mac . Those re-sales dropped more than forecast last month to a 4.93 million annual pace, the weakest reading since May and down 6.1 percent from a 5.25 million pace in October, NAR data showed last week. Pending contracts for existing homes increased in November in the Northeast (up 1.4% above October), South (by 1.3%), and West (by 0.4%), but fell on a monthly basis in the Midwest (by 0.4%).

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