Existing Home Sales Improve 5.6% says NAR

Existing homes sales improved 5.6 percent to a to a seasonally adjusted annual rate of 4.68 million in November from 4.43 million in October according to the National Association of Realtors.  However, sales remain 27.9 percent below the cyclical peak of 6.49 million in November 2009, which was the initial deadline for the first-time buyer tax credit.

“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 Lawrence Yun, NAR chief economist.

According to NAR, home buyers are responding to improved affordability conditions due to the market for buying a home being the most favorable since the organization started measuring in 1970.  “Therefore, the market is recovering and we should trend up to a healthy, sustainable level in 2011,” said Yun.

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The national median existing-home price for all housing types was $170,600 in November, up 0.4 percent from November 2009. Distressed homes have been a fairly stable market share, accounting for 33 percent of sales in November; they were 34 percent in October and 33 percent in November 2009.

Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 5.6 percent to a seasonally adjusted annual rate of 4.68 million in November from 4.43 million in October, but are 27.9 percent below the cyclical peak of 6.49 million in November 2009, which was the initial deadline for the first-time buyer tax credit.

For the full report, see here.

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  • Admin,

    Please note headline. Prices did not go up; the number of sales did. We would be celebrating if prices went up 5.6%; however, this was not an insignificant increase in this category of home sales.

  • Could prices be bottoming out? Some economists are still talking about a double dip in values in 2011. Some of us are looking at the late part of the second calendar quarter of 2012 as the time when home values begin turning around nationally. Many believe home values will rise not uniformly but regionally over the next 18 months with gains and setbacks in most regions all during that period.

    Existing home sales going up is not as meaningful to our industry as it is to NAR except to note with rising sales HECMs for purchase are not a meaningful or statistically significant part of that upswing. Those who tout HECMs for purchase as more than a marginally useful tool for now need to look at trends as home sales increase to see the impact. Remember we have some in the industry who are training (?) others on how to increase sales in this area. Until there is a substantial increase in the percentage of case number assignments of HECMs for purchase per HUD statistics which greatly exceeds the percentage rise in home sales for a sustained period of time and stays at those levels until the actual number of transactions in a fiscal year is respectable, who is kidding whom about the relative importance of HECMs for purchase?

    HECMs for purchase will go up but many expect they will not be a strong portion even of our own market other than perhaps sporadically over the next decade. Percentage volume increases should be stronger in some regions than in others; for example, expect to see HECMs for purchase to be doing proportionately better in Arizona and Florida than California.

  • At the end of 2010 is an appropriate time to look back on some prognostications which were made in 2009. Much to the credit of NRMLA, mid 2009 it gathered information pointing to the downturn which we would see in fiscal 2010 if HUD dropped insured proceeds by 10%. Even though its projection was significantly off, it warned HUD and the industry that if things stayed as they were up to that point in time in fiscal 2009, here is what the negative results would be for the following fiscal year. Although wrong, NRMLA did an excellent job of at least trying to warn us all about the pending HUD appropriation legislation and the impact of the action HUD would be forced to take if the requested appropriation was not provided.

    What no one openly predicted in the press was the secondary market reaction to fixed rate HECMs last fiscal year. That saved the financial “bacon” for most of us who receive some portion of those profits.

    Now I need to point out one article in particular which was perhaps the most ill advised. In an industry magazine in November of 2009 (not published by NRMLA), one top executive was oblivious to even the warnings of NRMLA in the months before his article was published. In what can only be described as worthless advice, he wrote an article advising originators to avoid naysayers and stay positive (code for – only listen to me and those who agree with me). It stands as one of the worst examples of abusing a private conversation between an originator and a chief executive; yet to the credit of the executive, he did not actually name the individual.

    Here in part is some of what the executive wrote: “He admitted that few of the naysayers had an educated argument; they were just repeating news reports, vague market data and what ‘might be coming’. Unfortunately, all the negativity overcame him. He did leave the reverse mortgage industry…. So were things so dire? It’s true his commissions were down from a lower sales volume but only by 10 percent. I’m confident that a talented reverse mortgage specialist like this man could have overcome the slower start in 2009 and at least matched last year’s numbers. Instead, he bailed out. This is an unfortunate case of too much compiled negativity leading to desperate decisions. …he fell victim to an assault of negativity from the press, co-workers, friends and family. The lack of production was blamed on the market rather than identifying potential modifications he could make to his business model.”

    Was he including NRMLA or HUD among those naysayers? Was he saying they did not have an “educated argument”? How could this executive whose base income alone probably far exceeds that of the amount paid in total to his originator write and turn in for publication an article which states that it was “the negativity that overcame him” so that “he bailed out”? How does he know? Turning one against friends and family by stating that the originator “fell victim to an assault … from … friends and family” is not a high mark of professionalism in our industry. What did it do to the originator who most likely read the story? Why did this executive go out of his way to personally pen this speculative diatribe?

    What do these kinds of statements say about industry leaders? Thank goodness most of our leaders have the wherewithal to avoid personally writing down such remarks and voluntarily turning them in for publication — if they make such statements openly at all. Not only did the executive miss the boat on the endorsement volume outlook for the industry, he abused his relationship with a very thoughtful originator in the process to make us clear that we should “ignore naysayers and stay positive”. There should be a NRMLA prize for the worst article of the year written by an industry executive naming this individual as its first recipient.

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