WASHINGTON/PRNewswire/ -- Existing single-family rose in November on the strength of lower interest rates, according to the National Association of Realtors.
Existing-homes increased 4.4 percent to a seasonally adjusted annual rate of 5.22 million units in November from an upwardly revised pace of 5.00 million units in October. Last month's sales activity was 1.4 percent above the 5.15-million unit pace in November 1999.
Dr. David Lereah, NAR's chief economist, said that lower interest rates are helping to sustain the market. "Mortgage interest rates have dropped three-quarters of a percentage point since peaking in May, which is keeping sales strong in the closing months of the year," he said. We expect a total of 5.01 million existing-home sales this year, making it the second strongest on record," he added.
According to Freddie Mac, the national average commitment rate for a 30- year, conventional, fixed-rate mortgage was 7.75 percent in November, down from 7.80 percent in October; it was 7.74 percent in November 1999.
NAR President Richard A. Mendenhall said the sustained drop in interest rates is especially helpful to first-time buyers. "At this time of the year, we see higher ratios of first-time home buyers, especially singles and childless couples entering the market, and these are the people who benefit the most from lower interest rates," he said. "In turn, this allows people to sell their existing homes and trade-up to larger properties, which is why the market is doing so well," he explained.
Housing inventory levels fell 13.4 percent at the end of November with 1.55 million existing homes available for sale, which represents a 3.6-month supply at the current sales pace. Inventory levels remain 13.9 percent below the 1.80 million homes available in November 1999.
The national median existing-home price was $139,900 in November, up 5.0 percent from November 1999 when the median price was $133,200. The median is the midpoint -- half the homes sell for less, while half sell for more.
Regionally, existing-home sales in the Northeast rose 10.0 percent from October to a pace of 660,000 units in November; the rate was 6.5 percent above November 1999. The median existing-home price in the Northeast was $143,200, up 5.1 percent from a year ago.
In the Midwest, existing homes were selling at an annual rate of 1.16 million units in November, up 8.4 percent from October. The pace was 0.9 percent below November 1999. The median price in the Midwest was $118,500, down 0.4 percent from November 1999. "The drop in the Midwestern median home price looks more like an inventory problem with higher-end homes, coupled with a seasonal shift to lower-priced homes being sold at this time of year," Lereah said.
In the West, home re-sales rose 6.0 percent in November to an annual rate of 1.41 million units. The pace was 2.2 percent above November 1999. The median existing-home price in the West was $188,900 up percent 7.8 from the same month a year earlier.
The existing-home sales pace in the South slipped 0.5 percent in November to an annual rate of 1.99 million units; however, they were 0.5 percent above November 1999. The median price of an existing home in the South was $130,100, which was percent 7.5 higher than a year ago.