WASHINGTON – Sales of existing U.S. homes continued to fall last month, led by the Northeast, as the nation posted “probably the largest price decline since the Great Depression,” Lawrence Yun, chief economist at the National Association of Realtors, said in the trade group’s monthly report.
Total sales of existing homes – including single-family, townhomes, condominiums and co-ops – fell to a seasonally adjusted rate of 4.49 million units per year, the NAR found. That represented an 8.6-percent decline from October’s revised annual rate of 4.91 million units and the November 2007 pace of 5.02 million units per year.
Analysts had expected existing-home sales would fall to a November level of 4.93 million units per year, from October’s originally reported 4.98 million pace, based on the median forecast from a Bloomberg News survey of 63 economists. (Their projections ranged from 3.98 million to 5.2 million units per year.)
At the end of November, the nation had 4.20 million existing homes for sale, a 0.1-percent increase from the housing inventory at the end of October, the NAR reported. At the current pace of sales, that represented an 11.2-month supply, up from October’s 10.3-month housing supply.
Meanwhile, the median price of existing homes sold last month fell to $181,300, for a year-over-year decline of 13.2 percent that was the largest since recordkeeping began.
“The quickly deteriorating conditions in the job market, stock market and consumer confidence in October and November have knocked down home sales to another level,” Yun said in today’s NAR report.
“We hope the home sales impact from the stock market crash turns out to be short-lived, as was the case in 1987 and 2001,” he said. “It is therefore imperative to provide incentives for homebuyers to get back into the market.” The potential for recovery “also depends on how effectively Congress and the new administration can help facilitate the short-sales process and unclog the mortgage pipeline” that currently blocks even “some buyers with good credit,” Yun added.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the trade group is grateful that the U.S. Treasury, Federal Reserve and Federal Housing Finance Agency have been working to bring down mortgage interest rates.
But he called for an expansion of the government’s current programs. “We should extend the first-time buyer tax credit to all homebuyers and eliminate the repayment feature, and make permanent the higher loan limits that are vital in high-cost markets,” McMillan said. “The faster we do this, the faster housing and the economy can recover.”
In the Northeast, existing-home sales fell to an annual pace of 730,000, a decline of 12.0 percent compared with October and 18.0 percent from a year ago. By comparison, other regions posted month-over-month sales declines of 10.9 percent in the South, 7.4 percent in the Midwest and 4.3 percent in the West; and year-over-year declines 17.9 percent in the West, 17.6 percent in the South and 16 percent in the Midwest.
The median price of homes sold in the Northeast last month fell to $257,700, for a year-over-year decline of 0.1 percent. Other regions saw year-over-year declines of 10.6 percent in the South, 11.2 percent in the Midwest and 25.5 percent in the West.
“November sales just collapsed,” Chris Low, chief economist at FTN Financial in New York, told Bloomberg News. “Price declines are accelerating. As bad as this is, it’s going to be considerably worse in a month’s time.”
The National Association of Realtors is the nation’s largest trade association, with more than 1.3 million members in all aspects of residential and commercial real estate. Additional information, including the full Existing Home Sales report, is available at www.realtor.org.
