Home Resales See Rare Decline as All-Cash Transactions Up to 32%

Home Resales See Rare Decline as All-Cash Transactions Up to 32%Higher mortgage rates and harder-to-get credit helped trigger a rare decrease in sales of existing homes in November.
Home resales fell by 4.3 percent in November to a seasonally-adjusted annual rate of 4.90 million, from 5.12 million in October.
That’s 1.2 percent below the 4.96 million-unit pace in November 2012 — and this is the first time in 29 months that sales were below year-ago levels, according to the National Association of Realtors.
The national median existing-home price for all housing types was $196,300 in November, up 9.4 percent from November 2012.
Distressed homes – foreclosures and short sales – accounted for 14 percent of November sales, unchanged from October. They were 22 percent in November 2012. A smaller share of distressed sales is contributing to price growth.
All-cash sales represented 32 percent of transactions in November, up from 31 percent in October and 30 percent in November 2012.
Individual investors, who account for many cash sales, purchased 19 percent of homes in November, unchanged from October and from November 2012. Last month, seven out of 10 investors paid cash.
First-time buyers accounted for 28 percent of purchases in November, unchanged from October; they were 30 percent in November 2012.
“Home sales are hurt by higher mortgage interest rates, constrained inventory and continuing tight credit,” he said. “There is a pent-up demand for both rental and owner-occupied housing as household formation will inevitably burst out, but the bottleneck is in limited housing supply, due to the slow recovery in new home construction. As such, rents are rising at the fastest pace in five years, while annual home prices are rising at the highest rate in eight years.”
Nine percent of November sales were foreclosures, and 5 percent were short sales. Foreclosures sold for an average discount of 17 percent below market value in November, while short sales were discounted 13 percent.
Total housing inventory at the end of November declined 0.9 percent to 2.09 million existing homes available for sale, which represents a 5.1-month supply at the current sales pace, compared with 4.9 months in October. Unsold inventory is 5.0 percent above a year ago, when there was a 4.8-month supply.
The median time on market for all homes was 56 days in November, up from 54 days in October, but well below the 70 days on market in November 2012.
Short sales were on the market for a median of 120 days, while foreclosures typically sold in 59 days, and non-distressed homes took 55 days. Thirty-five percent of homes sold in November were on the market for less than a month.

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