Home resales moved to a 10-month high in November, the latest in a series of strong showings from the housing sector.
According to the National Association of REALTORS®, November’s Existing Home Sales rose to a seasonally-adjusted, annualized 4.42 million units nationwide — a 4 percent climb from October 2011.
An “existing home” is a home that has been previously occupied and cannot be categorized as new construction.
Home buyers and sellers throughout Chicago should take note of November’s numbers because — behind the headlines — there’s a series of statistics that foretell higher home prices ahead.
First, the total number of homes for sale nationwide dipped to 2.58 million, an 18% reduction from November 2010 and represents the fewest number of homes for sale since February 2007.
At the current sales pace, the complete home resale inventory would be sold in 7.0 months.
And, second, the real estate trade group reports that 33% of all homes under contract “failed” for some reason last month.
Contract failures can occur because of mortgage denials in underwriting; home inspection issues; and homes appraising for less than their respective purchase prices.
In other words, despite a reduction in the number of homes for sale, and a rash of failed contracts, Existing Home Sales volume is still on the rise.
Broken-down by buyer-type, here’s to whom home sellers were selling in November :
- First-time buyers : 35% of home resales, up from 34% in October 2011
- Repeat buyers : 46% of home resales, down from 48% in October 2011
- Investor buyers : 19% of home resales, up from 18% in October 2011
Given high demand for home resales and shrinking home supplies, we should expect that Lincoln Park home prices will rise through December 2011 and into early-2012, at least. Recent Housing Starts data supports this notion.
Thankfully, mortgage rates remain low. Low mortgage rates help keep homes affordable.