Sales of existing U.S. homes slumped in November, according to the National Association of Realtors, pulling down the median price as the supply of homes contracted and stock market worries held buyers back.
Total existing-home sales sank 6.1 percent to a seasonally adjusted annual rate of 4.93 million in November, down from 5.25 million in October, the highest level of the year. Compared with a year ago, sales are still up 2.1 percent however.
The median home price fell to $205,300, down from $207,500 in October, but was up 5.0 percent November 2013. Prices have been rising on a year-over-year basis now for 33 straight months.
“Fewer people bought homes last month despite interest rates being at their lowest levels of the year,” said NAR chief economist Lawrence Yun. “The stock market swings in October may have impacted some consumers’ psyches and therefore led to fewer November closings. Furthermore, rising home values are causing more investors to retreat from the market.”
He added that “lagging homebuilding activity continues to hamstring overall housing supply and is still too low in relation to this year’s promising job growth. Much faster price and rent appreciation – easily exceeding wage growth – will occur next year unless new construction picks up measurably.”
There were fewer homes for sale in general in November, with total existing-home inventory falling 6.7 percent to 2.09 million properties. At the current sales price that represents a 5.1-month supply.
Interest rates remained ultra-low, with the average rate on a 30-year fixed rate conventional mortgage rate declining to 4.00 percent in November, according to data from Freddie Mac, down from 4.04 percent the month before.