November Home Sales Dip Nationwide

Key Highlights

• Existing-home sales decreased in November to a seasonally-adjusted annual rate of 6.69 million – down 2.5% from the prior month, but up 25.8% from one year ago.

• The median existing-home price was $310,800, 14.6% more than in November 2019.

• Total housing inventory declined from the prior month and one year ago to 1.28 million, enough to last 2.3 months at the current sales pace – both record-low figures. Homes typically sold in 21 days.

WASHINGTON (December 22, 2020) – Existing-home sales fell in November, snapping a five-month streak of month-over-month gains, according to the National Association of Realtors®. All major regions either took a step back or held steady in terms of their respective month-over-month status, but each of the four areas experienced significant year-over-year growth. MORE BELOW

Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 2.5% from October to a seasonally-adjusted annual rate of 6.69 million in November. However, sales in total rose year-over-year, up 25.8% from a year ago (5.32 million in November 2019). "Home sales in November took a marginal step back, but sales for all of 2020 are already on pace to surpass last year's levels," said Lawrence Yun, NAR's chief economist. "Given the COVID-19 pandemic, it's amazing that the housing sector is outperforming expectations." Yun notes that job recoveries have stalled in the past few months, and fast-rising coronavirus cases along with stricter lockdowns have weakened consumer confidence. "Circumstances are far from being back to the pre-pandemic normal," he said. "However, the latest stimulus package and with the vaccine distribution underway, and a very strong demand for homeownership still prevalent, robust growth is forthcoming for 2021." The median existing-home price2 for all housing types in November was $310,800, up 14.6% from November 2019 ($271,300), as prices increased in every region. November's national price increase marks 105 straight months of year-over-year gains. Total housing inventory3 at the end of November totaled 1.28 million units, down 9.9% from October and down 22% from one year ago (1.64 million). Unsold inventory sits at an all-time low 2.3-month supply at the current sales pace, down from 2.5 months in October and down from the 3.7-month figure recorded in November 2019. Properties typically remained on the market for 21 days in November, seasonally even with October and down from 38 days in November 2019. Seventy-three percent of homes sold in November 2020 were on the market for less than a month. "The positive momentum that home sellers are seeing will carry on well into the new year," Yun predicted, citing low mortgage rates and remote-work flexibilities. Yun's projections of a continued housing market rebound were the consensus among economic and housing experts during NAR's Real Estate Forecast Summit, held earlier this month. Industry insiders in attendance agreed that mortgage rates will hover around 3% in the coming year, and said they expect an annual median home price increase of 8.0%. "Housing affordability, which had greatly benefitted from falling mortgage rates, are now being challenged due to record-high home prices," Yun said. "That could place strain on some potential consumers, particularly first-time buyers." First-time buyers were responsible for 32% of sales in November, equal to the percentage seen in both October 2020 and November 2019. NAR's 2020 Profile of Home Buyers and Sellers – released last month4 – revealed that the annual share of first-time buyers was 31%. Individual investors or second-home buyers, who account for many cash sales, purchased 14% of homes in November, identical to the share recorded in October 2020 and a small decline from 16% in November 2019. All-cash sales accounted for 20% of transactions in November, up from 19% in October but unchanged from November 2019. Distressed sales5 – foreclosures and short sales – represented less than 1% of sales in November, equal to October's percentage but down from 2% in November 2019. "While we still face economic and health challenges ahead, I have zero doubt that the nation will continue to recover from this pandemic," said NAR President Charlie Oppler, a Realtor® from Franklin Lakes, N.J., and broker/owner of Prominent Properties Sotheby's International Realty. "Whether it's through volunteering or philanthropy, or helping a given buyer secure that dream home, Realtors® have stepped up in a major way and we will continue with those efforts in 2021 and beyond." According to Freddie Mac, the average commitment rate(link is external) for a 30-year, conventional, fixed-rate mortgage decreased to 2.77% in November, down from 2.83% in October. The average commitment rate across all of 2019 was 3.94%. Single-family and Condo/Co-op Sales Single-family home sales sat at a seasonally-adjusted annual rate of 5.98 million in November, down 2.4% from 6.13 million in October, and up 25.6% from one year ago. The median existing single-family home price was $315,500 in November, up 15.1% from November 2019. Existing condominium and co-op sales were recorded at a seasonally-adjusted annual rate of 710,000 units in November, down 2.7% from October and up 26.8% from one year ago. The median existing condo price was $271,400 in November, an increase of 9.5% from a year ago. Regional Breakdown Median home prices increased at double-digit rates in each of the four major regions from one year ago. November 2020 saw existing-home sales in the Northeast drop 2.2%, recording an annual rate of 880,000, a 25.7% increase from a year ago. The median price in the Northeast was $354,100, up 17.4% from November 2019. Existing-home sales fell 2.5% in the Midwest to an annual rate of 1,590,000 in November, but up 24.2% from a year ago. The median price in the Midwest was $239,100, a 14.6% increase from November 2019. Existing-home sales in the South decreased 3.8% to an annual rate of 2.82 million in November, up 25.9% from the same time one year ago. The median price in the South was $270,000, a 15.0% increase from a year ago. Existing-home sales in the West were unchanged from last month, recording an annual rate of 1,400,000 in November, a 27.3% increase from a year ago. The median price in the West was $467,600, up 13.8% from November 2019. The National Association of Realtors® is America's largest trade association, representing more than 1.4 million members involved in all aspects of the residential and commercial real estate industries. # # # For local information, please contact the local association of Realtors® for data from local multiple listing services (MLS). Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology. NOTE: NAR's Pending Home Sales Index for November is scheduled for release on December 30, and Existing-Home Sales for December will be released January 22; release times are 10:00 a.m. ET. Information about NAR is available at www.nar.realtor. This and other news releases are posted on the NAR Newsroom at www.nar.realtor/newsroom. Statistical data in this release, as well as other tables and surveys, are posted1 Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR rebenchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs. Existing-home sales, based on closings, differ from the U.S. Census Bureau's series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90% of total home sales, are based on a much larger data sample – about 40% of multiple listing service data each month – and typically are not subject to large prior-month revisions. The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns. Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos. 2 The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received. The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR's quarterly metro area price reports. 3 Total inventory and month's supply data are available back through 1999, while single-family inventory and month's supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90% of transactions and condos were measured only on a quarterly basis). 4 Survey results represent owner-occupants and differ from separately reported monthly findings from NAR's Realtors® Confidence Index, which include all types of buyers. Investors are under-represented in the annual study because survey questionnaires are mailed to the addresses of the property purchased and generally are not returned by absentee owners. Results include both new and existing homes. 5 Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR's Realtors® Confidence Index, posted at nar.realtor.

Help on the Way! Congress Reaches $900 Billion Stimulus Deal

Many Americans Could See Relief Funds as Early as Next Week

What’s in the $900 billion coronavirus relief plan: Stimulus checks, unemployment aid and more...

KEY POINTS

• Congress released details of the $900 billion coronavirus relief package.

• The legislation includes a $300 weekly unemployment supplement, $600 direct payments, nearly $300 billion in Paycheck Protection Program loans and more than $8 billion for vaccine distribution.

Congress’ deal on a $900 billion coronavirus relief plan includes more small business aid, another round of direct payments to Americans, an additional unemployment supplement and funding to streamline Covid vaccine distribution.

The more than 5,000-page bill, which lawmakers released Monday afternoon only hours before expected votes, would address many facets of the health and economic crisis.

• It would add a $300 per week federal unemployment insurance supplement through mid-March. The plan would also extend the Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation programs, which expanded jobless benefits eligibility and allowed people to continue to receive payments after their state assistance ran out, through mid-March.

• The bill would put $284 billion into Paycheck Protection Program loans, which can be forgiven, and allow hard-hit small businesses to draw a second round of funding. It would include $20 billion in grants for companies in low-income areas and money set aside for loans from community-based and minority-owned lenders.

• The package would send direct payments of $600 to most Americans — down from the $1,200 passed in March as part of the CARES Act. Families will also get $600 per child. Individuals who earned up to $75,000 per year and couples filing jointly who made up to $150,000 in 2019 will receive the full sum. The payments will phase out until they stop for individuals and couples who made $99,000 and $198,000, respectively. Mixed-status households, in which a member of the family does not have a Social Security number, will also receive payments, retroactive to the CARES Act.

• The bill would extend the federal eviction moratorium through Jan. 31. It would put $25 billion into a rental assistance fund, which state and local governments would allocate to people to use for past due and future rent or utilities payments.

• The plan would put more than $8 billion into distribution of the two FDA-approved Covid-19 vaccines. It would also set aside $20 billion to make sure Americans get the shot for free. It would direct at least $20 billion to states for testing and contact tracing efforts.

• During the worst hunger crisis the U.S. has seen in years, the measure would put $13 billion into boosting Supplemental Nutrition Assistance Program benefits by 15% and funding food banks, among other programs.

• The bill would put $45 billion into transportation, including at least $15 billion for airline payroll assistance, $14 billion for transit systems and $10 billion for state highways.

• The legislation would direct $82 billion into education, including more than $54 billion for public K-12 schools and nearly $23 billion for higher education. Schools require additional resources such as personal protective equipment to stay open safely.

• It puts $10 billion into child care assistance.

• The proposal would send $15 billion in aid to live event venues, movie theaters and cultural museums.

• The measure sets aside $7 billion to increase broadband access.

Source: CNBC.com/Reuters

Despite Pandemic, June Marks Two Consecutive Months of Increased Contract Activity

NAR: July 30, 2020: The recent flare-up in COVID cases hasn’t slowed the U.S. housing markets, according to the latest Pending Home Sales Index (PHSI) from the National Association of REALTORS® (NAR). For June, pending home sales increased 16.6 percent, marking the second consecutive month of increasing contract activity. The index is now at 116.1 on a national level—according to NAR, an index of 100 is equal to the level of contract activity in 2001.

All four major regions saw month-over-month growth in June. The Northeast, however, was the only region to not record YoY increases in pending transactions.

NAR revised its forecast for the remainder of 2020, expecting existing-home sales to decline by only 3 percent, with sales increasing to 5.6 million by the fourth quarter. In addition, NAR expects a positive GDP growth of 4 percent in 2021, which could help boost existing and new-home sales, forecasted to grow by 7 and 16 percent, respectively. In terms of mortgage interest rates, NAR predicts they will stay near 3 percent over the next 18 months, while home prices are forecast to increase by 4 percent in 2020 before moderating to 3 percent in 2021 with the addition of new supply.

Regional Breakdown: Northeast +54.4% MoM – Now 95.4 PHSI -0.9% YoY

Midwest +12.2% MoM – Now 110.9 PHSI +5.1% YoY

South +11.0% MoM – Now 140.3 PHSI +10.3% YoY

West +11.7% MoM – 99.6 PHSI +4.7% YoY Here’s What the Industry’s Saying: “It is quite surprising and remarkable that, in the midst of a global pandemic, contract activity for home purchases is higher compared to one year ago. Consumers are taking advantage of record-low mortgage rates resulting from the Federal Reserve’s maximum liquidity monetary policy. The Northeast’s strong bounce back comes after a lengthier lockdown, while the South has consistently outperformed the rest of the country. These remarkable rebounds speak to exceptionally high buyer demand. While the outlook is promising, sharply rising lumber prices are concerning. A reduction in tariffs—even if temporary—would help increase home building and thereby spur faster economic growth.” — Lawrence Yun, Chief Economist, National Association of REALTORS® “Pending home sales followed up their May rebound with another solid increase in June, as strong housing demand and low mortgage rates drive purchase activity. Pending sales were up over 6 percent compared to June 2019, which is consistent with the now 10 straight weeks of annual increases in home purchase applications we have reported. While this is another piece of positive news for the housing market, there is some uncertainty ahead. COVID-19 cases are rising in many parts of the country, the unemployment benefits extension remains in doubt, and housing inventory remains tight.” — Joel Kan, AVP of Economic and Industry Forecasting, Mortgage Bankers Association

“Housing market activity in June was strong, with buyers benefiting from extremely low mortgage rates that have continued declining all the way through July. Pending sales reflect contracts in June, which will close in July and August, and increasing sales in July are consistent with other data we are monitoring. Inventory has remained low, and we have seen new home sales pick up substantially as a result of pent-up demand and low levels of existing home inventory.

“The impacts of social distancing seem to have more lasting impacts on supply, as new listings remain well below the 2019 levels despite the resurgence of demand we saw in May and June. The dynamics created by pent-up demand and low levels of supply likely will result in an acceleration in price growth in July. If we see a further slowing in the pace of new listings coming on the market as a result of the recent surge in coronavirus cases, and mortgage rates continue to spur demand, we could continue to see upward pressure on home prices. It’s still not clear to what extent demand has been impacted in the second half of July by the case surge, but we expect to see some drop-off in demand as social distancing increases. Recent innovations that have made virtual tours straightforward and consumers adapting to fewer in-person showings are likely to reduce some of the impact of the surge.” — Ruben Gonzalez, Chief Economist, Keller Williams