Sales of existing homes surged 5.6 percent in November compared to the previous month, according to the National Association of Realtors, the fastest pace since December 2006.
Strong gains were seen in sales of both single-family homes and condominiums, Yun Cohen, a research assistant at the National Association of Federally Insured Credit Unions (NAFCU), noted in the latest Macro Data Flash report.
Overall, November’s existing-home sales were 3.8 percent higher than a year ago.
Cohen said the number of existing homes on the market dropped to its second-lowest level since 1999.
“As the FOMC (Federal Open Markets Committee) signals multiple rate hikes in 2018, mortgage rates are expected to increase, which could further affect affordability,” she said.
Cohen added that the lack of inventory has put upward pressure on prices. The median price went up from $246,000 in October to $248,000 in November. The median price is 5.8 percent higher than it was a year ago.
Sales rose in three of the four regions in November. The Midwest rose 8.4 percent, followed by the South, which jumped 8.3 percent. Cohen said the increase in the South was due in large part to hurricane-related moves. Further, existing home sales were up 6.7 percent in the Northeast, but were down 2.3 percent in the West.
At the end of November, there were 3.4 months of supply, down from 3.9 months in October. Inventory dropped 7.2 percent in November. It is down 9.7 percent from a year ago.