Purchases of previously occupied homes jumped to their highest level in eleven years as rising demand into the year-end, normally a slow period, bodes well for the housing market in 2018.
Sales of existing homes, the largest category of housing, surged 5.6 percent in November to an annualized rate of 5.81 million units following the pior month's 5.5 million, reported the National Association of Realtors (NAR) on Wednesday.
Analysts in the Reuters survey had predicted a much smaller 0.9 percent gain and a rate of 5.52 million transactions. It was the fastest pace of home sales since 6.4 million in December 2006, in the midst of tthe three year collaspe of the housing bubble.
Existing homes sales account for 90 percent of all home purchases and are recorded when a contract closes and the property changed hands. First time buyers were 29 percent of the purchasers, off from 32 percent in October and below the 40 percent historical average.
The median selling price climbed 5.8 pecrent to $248,000 and the inventory of properties for sales dropped 9.7 percent to 1.67 million, the second lowest in the 18 year series. Close to half the November sales, 44 percent, had been on the market for one month or less.
At last month's sales pace it would take 3.4 months to clear existing inventory, down from 3.9 months in October and the lowest amount in these records which go back to 1999. The NAR considers 5-6 months normal inventory.
Sales rose in three of four US geographic regions, fronted by an 8.4 percent gain in the Midwest and an 8.3 percent advance in the South. Purchases fell 2.3 percent in the West.
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Existing Home Sales