According to National Association Of Realtors, the sales of pre owned homes dropped lower than expected this November. Existing home sales were expected to slow down with a 5.3 million sales based on a seasonally adjusted rate. However, November's reading resulted to a 4.76 million sales and it represented a 10.5% drop in existing home sales for month-to-month. For a year-over-year figures, existing home sales were 3.8% lower.
This reading represents the first time that the year-over-year reading for existing homes was lower than its previous months, since September 2014. This November reading is also the sharpest dip in existing home sales since 2010 July and is actually considered a "statistical anomaly". A drop as sharp as this is unusual, unless housing tax credits expire and leads to a home sales drop .
Possible Causes Of Lower Sales
A good supply of homes caused a rise in home demand in 2015, and an insufficient supply of homes usually causes the costs to increase and the sales to drop since affordability also decreases. In November, first time home buyers were accounted for 30% of all buyers of home, but this specific population usually accounts for 40% of all buyers of home. The average home price increased to $220,300 during that month nationally, and it presents a year-over-year rise of 6.3%.
Since home price is increasing faster than wage does, this should be a major obstacle for potential buyers. Furthermore, new regulations that has increased many home sales' closing period may have also pushed sales to December even though they could have also closed in November.
National Association Of Realtors forecasts that pre owned homes sales will go up to 5.2 million next year and this will represent a 2.9% increase in existing home sales. Reports on home sales, new and pending, will help give us a bigger picture of the housing market trends as this year gets to an end.
