Existing Home Sales Jump, Beat Expectations

Housing data are now all in place, showing strong acceleration going into year end. Existing home sales jumped 5.6 percent in November to a 5.810 million annualized rate that easily beats Econoday's high estimate. November's rate is by far the strongest of this expansion with 5.700 million in March last year the next closest.

But the high volume of sales has pulled down available supply sharply which will limit sales in the next report for December. Supply on the market fell 7.2 percent in the month to 1.670 million. On a sales basis, supply was at only 3.4 months in November vs 3.9 months in October. Price data point to a healthy seller's market, up 0.8 percent on the month to a median $248,000 for a 5.8 percent year-on-year gain.

Regional sales data show 8 percent plus surges in the Midwest and South and nearly as strong of a gain in the Northeast where activity, which had been soft, has been picking up noticeably. Sales in the West slipped in the month.

This report follows two months of similarly strong results on the new home side of the market and, because of the acceleration, raises the question whether expected tax changes for next year are at play. But the National Association of Realtors, citing client comments, says the tax bill did not influence November's buying decisions and it further noted that the "great majority" of homeowners will qualify for mortgage interest and property tax deductions. Still, it will be interesting to see whether tax changes begin to affect home sales next year.

Recent History Of This Indicator:
New home sales have been climbing sharply while existing home sales showed strength of their own in October, up 2.0 percent to a 5.480 million annualized rate. Gains were posted for single-family resales, up 2.1 percent to a 4.870 million rate, and condos, up 1.7 percent to a 610,000 rate. The pending home sales index, which tracks initial signings for resales, jumped strongly in the last report and have forecasters looking for significant strength in this report for November, at a consensus rate of 5.550 million.