Americans might have curbed their appetite for new homes in November, but their taste for pre-owned models remained robust.
The National Association of Realtors said Wednesday that existing-home sales reached a record monthly pace in November, totaling 6.94 million on an annualized basis, up 2.7% from a revised 6.76 million in October. Economists had expected activity to slow slightly in November, to 6.75 million sales.
On a year-over-year basis, November's activity marked a 13.2% increase from the 6.13 million unit level of last November. The previous monthly record was 6.92 million, set in June of 2004.
"Mortgage interest rates dropped a quarter of a percentage point in late summer and then stabilized," said the association's chief economist, David Lereah. "Coupled with a growing labor market and a rising economy, this created optimal conditions for the housing sector."
On Monday, the Commerce Department said new single-family home sales for November fell 12% from October, although they were 3.6% above the year-ago month.
Lereah expects economic conditions in 2005 to be comparable with this year.
"Our forecast for the housing market is for a continuation of strong home sales, although down a little from the record-setting pace of 2004," he said. "We think slower sales will help to create a better balance between home buyers and sellers, but with tight inventories of homes available for sale, price appreciation hasn't slowed yet."
The national median existing-home price was $188,200 in November, up 10.4% from November 2003 when the median price was $170,500.
Housing inventory levels at the end of November rose 2.1% from October to a total of 2.48 million pre-owned homes available for sale, which represents a 4.3-month supply at the current sales pace.
Regionally, existing-home sales in the West jumped 6.5% to a record annual rate of 1.97 million units for the month. In the South, sales rose 1.8% to a record level of 2.83 million units, and the Northeast saw a decline of 1.3% to a pace of 740,000 units.