The headlines for existing home sales say that sales lost momentum – with sales declining year-over-year (seasonally adjusted data). Our analysis of the unadjusted data shows similar deceleration – but the unadjusted three month rolling averages for sales are positive this month after being in contraction all of 2014 and are accelerating. Bottom line – this was a bad month in a generally improving trend.
Follow up:
Econintersect Analysis:
NAR reported:
Unadjusted Year-over-Year Change in Existing Home Sales Volumes (blue line) – 3 Month Rolling Average (red line)
/images/z existing1.PNG
The graph below presents unadjusted home sales volumes.
Unadjusted Monthly Home Sales Volumes
/images/z existing2.PNG
Here are the headline words from the NAR analysts:
Lawrence Yun, NAR chief economist, says sales activity was choppy throughout the country in November and housing inventory began its seasonal decline. “Fewer people bought homes last month despite interest rates being at their lowest levels of the year,” he said. “The stock market swings in October may have impacted some consumers' psyche and therefore led to fewer November closings. Furthermore, rising home values are causing more investors to retreat from the market.”
“Lagging homebuilding activity continues to hamstring overall housing supply and is still too low in relation to this year's promising job growth,” says Yun. “Much faster price and rent appreciation – easily exceeding wage growth – will occur next year unless new construction picks up measurably.”
NAR President Chris Polychron says Fannie Mae and Freddie Mac's new low downpayment program should improve access to credit for responsible buyers. “NAR applauds Fannie and Freddie's commitment to homeownership by serving creditworthy borrowers who lack the resources for substantial downpayments plus closing costs with its new downpayment program,” he said. “The new program mitigates risk with strong underwriting and ensures that responsible buyers have access to safe and affordable mortgage credit. Furthermore, NAR believes lenders must do their part to ensure loans are prudently underwritten and are made available to qualified borrowers.”
