
Existing-Home Sales Up 5.6% in November
(November existing-homes sales report updated with market commentary.)
NEW YORK (
) -- Existing-home sales rose 5.6% in November to a better-than-expected seasonally adjusted annual rate of 4.68 million units, the National Association of Realtors said Wednesday.
On average economists were expecting the figure to come in at 4.65 million units, according to the consensus estimate compiled by
Briefing.com
,
compared with a rate of 4.42 million units sold in October
.
While the rate improved, it remained 27.9% below the cyclical peak of 6.49 million units in November 2009, which was the initial deadline for the
first-time buyer tax credit.
>>Homebuilder Stocks: Behind the Numbers
"Continuing gains in home sales are encouraging, and the positive impact of steady job creation will more than trump some negative impact from a modest rise in mortgage interest rates, which remain historically favorable," said NAR chief economist Lawrence Yun, indicating he is hopeful about the housing market in 2011.
"The relationship recently between
mortgage interest rates,
home prices and family income has been the most favorable on record for buying a home since we started measuring in 1970," he said. "Therefore, the market is recovering and we should trend up to a healthy, sustainable level in 2011."
October's rate of existing-home sales remained 25.9% below year-earlier levels "when sales were surging prior to the
initial deadline for the first-time buyer tax credit," the NAR said. July's rate of 3.84 million homes sold was a
15-year low.
The national median existing-home price for all housing types was $170,600 in November, up 0.4% year-over-year.
Distressed homes accounted for 33% of all existing-home sales last month, down slightly from a 34% share in October and flat year-over-year. Foreclosures accounted for two-thirds of the distressed sales.
Total housing inventory at the end of November fell 4% to 3.71 million homes available for sale. That represents a 9.5-month supply at the current sales pace, down from a 10.5-month supply in October.
New-home sales are expected to have increased to a rate of 300,000 in November, after falling 8.1% in October to rate of 283,000 units. The Commerce Department data is due out Thursday morning.
>>Housing Market to Recover in 2013: Analyst
A variety of factors have kept potential buyers from making home purchases in recent months. High unemployment, a lack of credit and the
expiration of federal tax credits for homebuyers are obvious reasons. The recent foreclosure scandal is also playing a part.
Last week's
disappointing homebuilding permits data further confirms that the "housing market recovery remains fragile at best," Kevin Brungardt, CEO of RoundPoint Financial, a mortgage origination and servicing firm, told the
TheStreet
.
He cited the usual suspects of high unemployment, potential buyers' low confidence in the stability of home prices and the large inventory of distressed properties that still need to be cleared.
Foreclosure activity declined dramatically in November, but Brungardt said the 21% month-over-month drop was "a false positive," a result of the so-called "robosigning" scandal that led to procedural delays and foreclosure moratoriums at servicers like
Bank of America
(BAC) - Get Report
and
JPMorgan Chase
(JPM) - Get Report
. Even
Fannie Mae
(FNMA.OB)
and
Freddie Mac
(FMCC.OB)
, which stand behind the vast majority of U.S. mortgages, have said they won't push forward on foreclosures during the holiday season.
Brungardt estimates the shadow inventory of homes could take two to three years to clear to a point when housing supply and demand begin to match up again.
Homebuilders should expect material dampening of
new-home purchases until then, Brungardt says.
Brungardt says the recent spike in
mortgage rates -- a jump of 70 basis points over a short period of time -- also worked to delay a housing market recovery. Rates are still historically low, he concedes, but need to stay in the 4.5% to 4.75% range in order to fuel a meaningful recovery. He expects mortgage rates will fall again and then level out for a period of time.
The homebuilder sector is well off this year's late-spring peak, when
Americans were rushing to take advantage of federal tax credits for homebuyers.
The
SPDR S&P Homebuilders
(XHB) - Get Report
, an exchange-traded fund that tracks the homebuilder sector, remains more than 60% off its peak of $46.08 in early 2006. The
iShares Dow Jones US Home Construction
(ITB) - Get Report
ETF remains more than 70% off its peak of $50.10 in the spring of 2006.
Homebuilder stocks were mostly higher on Wednesday. The XHB added 0.4% in afternoon trading while the ITB gained 1.4%. Among individual builders,
D.R. Horton
(DHI) - Get Report
jumped 2.6%,
Toll Brothers
(TOL) - Get Report
1.9%,
PulteGroup
(PHM) - Get Report
3.7% and
Lennar
(LEN) - Get Report
2.5%. Small-cap builder
Hovnanian Enterprises
(HOV) - Get Report
, which posted disappointing quarterly results early Wednesday, saw its shares fall 3.4%.
-- Written by Miriam Marcus Reimer in New York.
>To contact the writer of this article, click here:
Miriam Reimer
.
>To follow the writer on Twitter, go to
.
>To submit a news tip, send an email to:
.
READERS ALSO LIKE:
>> 14 REITs Increasing Dividends Annually
>> 18 Overbought Stocks to Sell Now
>> Bankruptcy Watch: 20 Riskiest Restaurant Stocks
>>See our new stock quote page.
Get more stock ideas and investing advice on our sister site,
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.









