January 18th, 2014 4:08 PM by Eileen Denhard
Existing-home sales fell 4.3 percent in November to a seasonally adjusted annual rate of 4.9 million, down from 5.12 million in October, according to the NATIONAL ASSOCIATION OF REALTORS® . Sales were 1.2 percent below the level reported in November 2012, which marks the first time in 29 months that sales were below year-earlier levels.
NAR chief economist Lawrence Yun says the market is being squeezed by higher mortgage interest rates, declining inventory and problems with tight credit. “There is a pent-up demand for both rental and owner-occupied housing as household formation will inevitably burst out, but the bottleneck is in limited housing supply, due to the slow recovery in new home construction. As such, rents are rising at the fastest pace in five years, while annual home prices are rising at the highest rate in eight years.”
Distressed homes – foreclosures and short sales – accounted for 14 percent of November sales, unchanged from October; they were 22 percent in November 2012. Nine percent of November sales were foreclosures, and 5 percent were short sales. Foreclosures sold for an average discount of 17 percent below market value in November, while short sales were discounted 13 percent.
Total housing inventory at the end of November fell 0.9 percent to 2.09 million existing homes available for sale, which represents a 5.1-month supply at the current sales pace, compared with 4.9 months in October. Unsold inventory is 5.0 percent above a year ago, when there was a 4.8-month supply.