The National Housing Market Continues Upward Trend
National home sales are at a three year high.
After climbing steadily for the past three months, November’s Pending Home Sales Index rose 1.7 percent to 106.4. This is the highest the Index has reached since April 2010, when the deadline for the home buyer tax credit was approaching. But November’s increase isn’t due to stimulus; rather, an increase in demand and highly favorable housing affordability conditions are spurring the gains. Existing-home sales, meanwhile, rose 5.9 percent in November to a seasonally adjusted rate of 5.04 million. Existing-home sales haven’t been this high since November 2009, when sales topped 5.44 million.
Housing inventory continues to decline.
At the end of November, 2.03 million existing homes were available for sale―a 4.8 month supply at the current sales pace. There haven’t been this few homes on the market since September 2005, when the supply would have lasted 4.6 months.
Who is taking advantage of favorable conditions?
Thirty percent of all November purchases were made by first-time buyers―compared with last year’s October and November figures―at 31 and 35 percent respectively. Cash buyers were responsible for 19 percent of all home purchases in November, a figure almost unchanged from 20 percent in October 2012 and 19 percent in November 2011.
The number of distressed homes on the market may be on a downward trend.
Distressed homes accounted for 22 percent of November home sales. Twelve percent of homes sold were foreclosures, while 10 percent were short sales. Last year, foreclosures and short sales accounted for 24 percent of all sales in October and 29 percent in November 2011.
Predictions for the coming year are positive.
There are currently fewer delinquent mortgages than in years past; the number of distressed homes on the market in the coming year is expected to fall into the teens. Economists with the National Association of Realtors expect existing-home sales to rise 8 to 9 percent in 2013. The national median price of existing homes, meanwhile, should rise another 4 percent next year after climbing more than 7 percent in 2012.
