2011 might end on a high note after all, after two of the latest housing data reports show slightly improved metrics.
First, the latest monthly data shows total existing-home sales increased 4 percent to a seasonally adjusted annual rate of 4.42 million in November from 4.25 million in October. The November 2011 number is also a 12.2 percent increase from the 3.94 million-unit pace in November 2010. Lawrence Yun, NAR chief economist, said more people are taking advantage of the buyer’s market.
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“Sales reached the highest mark in 10 months and are 34 percent above the cyclical low point in mid-2010 — a genuine sustained sales recovery appears to be developing,” he said. “We’ve seen healthy gains in contract activity, so it looks like more people are realizing the great opportunity that exists in today’s market for buyers with long-term plans.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 3.99 percent in November from 4.07 percent in October; the rate was 4.30 percent in November 2010.
The November report could have jumped even more if it wasn’t for an elevated level of contract failures — reported by 33 percent of NAR members in November. That is the same number reported in October, but this time last year it was only at 9 percent.
Total housing inventory at the end of November fell 5.8 percent to 2.58 million existing homes available for sale, which represents a 7-month supply at the current sales pace, down from a 7.7-month supply in October
The national median existing-home price for all housing types fell again as well. It was $164,200 in November, down 3.5 percent from a year ago. Distressed homes accounted for 29 percent of sales in November (19 percent were foreclosures and 10 percent were short sales), compared with 28 percent in October and 33 percent in November 2010.
All-cash sales accounted for 28 percent of purchases in November; they were 29 percent in October and 31 percent in November 2010. Investors make up the bulk of cash transactions.
Investors purchased 19 percent of homes in November, little changed from 18 percent in October and 19 percent in November 2010. First-time buyers accounted for 35 percent of transactions in November, up from 34 percent in October and 32 percent in November 2010.
Single-family home sales rose 4.5 percent to a seasonally adjusted annual rate of 3.95 million in November from 3.78 million in October, and are 12.9 percent above the 3.5 million-unit level in November 2010. The median existing single-family home price was $164,100 in November, down 4.0 percent from a year ago.
Regionally, existing-home sales in the Northeast jumped 9.8 percent to an annual pace of 560,000 in November and are 7.7 percent above a year ago. The median price in the Northeast was $240,200, which is 0.1 percent below November 2010.
Existing-home sales in the Midwest rose 4.3 percent in November to a level of 960,000 and are 15.7 percent higher than November 2010. The median price in the Midwest was $133,400, down 4 percent from a year ago.
In the South, existing-home sales increased 2.4 percent to an annual pace of 1.74 million in November and are 12.3 percent above a year ago. The median price in the South was $143,300, which is 2.1 percent below November 2010.
Existing-home sales in the West rose 3.6 percent to an annual level of 1.16 million in November and are 11.5 percent higher than November 2010. The median price in the West was $195,300, down 8.4 percent below a year ago.
Home production
Production of new single-family homes and apartments rose 9.3 percent to a seasonally adjusted annual rate of 685,000 units in November, according to figures released by the U.S. Commerce Department. This marks the fastest pace of housing starts since October of 2008.
“Along with recent gains that have been registered in builder confidence and other economic measures, the improvement in new-home production and permitting shown in this latest report provides further evidence of the gradual strengthening that we expected to see in housing markets toward the end of the year,” said David Crowe, National Association of Home Builders’ (NAHB) chief economist. “We anticipate continued, slow improvement in housing starts and sales through 2012.”
The 9.3 percent gain in combined starts activity resulted from improvements in both the single- and multifamily sectors in November. Single-family starts posted a 2.3 percent gain to a 447,000-unit pace, which was their fastest rate since June of 2011. Meanwhile, the more volatile multifamily side surged 25.3 percent to a 238,000-unit pace — the fastest since September 2008.
Combined housing starts were up in three out of four regions in November, with the Northeast posting the biggest gain of 53.8 percent, the West posting a 22.6 percent increase and the South registering a 4.1 percent gain. The Midwest was the exception to the rule, with an 18.2 percent decline.
Permit issuance, which can be an indicator of future building activity, rose 5.7 percent to a seasonally adjusted annual rate of 681,000 units in November — the best pace since March of 2010. Single-family permits rose 1.6 percent to 435,000 units while multifamily permits rose 13.9 percent to 246,000 units, which was their strongest pace since October of 2008.
Regionally, combined single- and multifamily permits gained 32.8 percent in the Northeast and 21.4 percent in the West, but declined 1.9 percent in the Midwest and 2.6 percent in the South in November.