Existing-Home Sales Up in November
Dec. 28, 2006 — -- The National Association of Realtors reports this morning that sales of existing homes increased slightly in November by 0.6 percent compared to October.
This is better than had been anticipated.
Americans bought existing homes at a seasonally adjusted annual rate of 6.28 million homes in November. Compared to a year ago, however, existing-home sales are down 10.7 percent.
The NAR also reports that the number of homes available for sale, the "inventory level," dropped 1 percent. There is now a 7.3 months' supply of homes available for sale, compared to 7.4 in October.
The report had good news for home buyers and bad news for sellers. The median sales price of an existing home came in at $218,000 in November, a drop of 3.1 percent compared to November of last year.
But buyers can't take heart, the price drop from October to November was only $1,000.
Industry Reaction?
The ever-optimistic David Lereah, the NAR's chief economist, said in a statement that he anticipated home sales would gradually continue to rise in 2007.
"We've entered a more sustainable period of home sales now, and we expect greater support for prices over time as inventory levels are eventually drawn down."
Translation, as the number of homes sold starts to increase, the supply of homes for sale will go down, which in turn could lead to more demand for homes than are available. That could push prices back up.
What does this mean?
While the housing market is definitely slower than it was a year ago, something anyone trying to sell a home could tell you, today's report combined with the positive new-home sales report released on Wednesday could lead to another rally on Wall Street today as 2006 comes to a close.
Good news for the economy. Good news for people's mutual funds and 401(k)s. Then again, the Dow is currently down, most likely because of some not-so-positive news in oil markets that could push oil prices up.
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