Home Sales Pop, Inventory Drops, Affordability Rocks, and Opportunity Knocks…
|Jay-Z and Oprah|
Home Sales Pop
According to the National Association of Realtors (NAR), existing-home sales got back on an upward path in November, resuming a growth trend since bottoming in July.
Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums, and co-ops, rose 5.6 percent.
Total housing inventory at the end of November fell 4.0 percent down from the supply in October.
Investors accounted for 19 percent of transactions in November, unchanged from October, but are up from 12 percent in November 2009; the balance of sales were to repeat buyers. All-cash sales were at 31 percent in November, up from 29 percent in October and 19 percent a year ago. “The elevated level of all-cash transactions continues to reflect tight credit market conditions,” LawrenceYun, NAR chief economist said.
Yun is hopeful for 2011. “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,” he said.
Yun added that home buyers are responding to improved affordability conditions. “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.”
NAR President Ron Phipps said good buying opportunities will continue. “Traditionally there are far fewer buyers competing for properties at this time of the year, so serious buyers have a lot of opportunities during the winter months,” he said. “Buyers will enjoy favorable affordability conditions into the new year, although mortgage rates are expected to gradually rise as 2011 progresses.”
“In the short term, mortgage interest rates should hover just above recent record lows, while home prices have generally stabilized following declines from 2007 through 2009,” Yun said. “Although mortgage interest rates have ticked up in recent weeks, overall conditions remain extremely favorable for buyers who can obtain credit.”