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Existing Home Sales Hit 3-Year Peak

By: MortgageLoan.com
Posted: 12/21/2012 12:02:00 PM
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Sales of pre-owned homes rose strongly in November, topping an annual rate of 5 million units and reaching their highest level in three years.

The National Association of Realtors (NAR) reports that existing home sales in November were at a seasonally adjusted rate of 5.04 million in November, a 5.9 percent increase from October's downwardly revised rate of 4.76 million.

The figure represents a 14.6 percent annual increase from the November 2011 rate of 4.40 million and is the highest rate reported since sales hit an annual pace of 5.44 million in Nov. 2009.

"Momentum continues to build in the housing market from growing jobs and a bursting out of household formation," said Lawrence Yun, NAR chief economist. "With lower rental vacancy rates and rising rents, combined with still historically favorable affordability conditions, more people are buying homes."

Yun said sales were depressed in some areas affected by Hurricane Sandy, but those impacts were offset by gains in other areas, so that overall sales in the Northwest were up.

Prices up 10 percent from last year

Median home prices also showed a healthy gain over the past 12 months, increasing 10.1 percent to $180,600 in November. It was the ninth consecutive month of annual price gains for existing homes, which hasn't occurred in over six years.

Distressed properties, including foreclosures and short sales, continue to make up a declining share of all sales, falling to 22 percent in November, down from 24 percent the month before and 29 percent in November 2011. Yun predicted that share will drop into the teens early next year, owing to declining numbers of seriously delinquent mortgages.

Despite the decline in distressed home sales the share of homes bought by investors has remained fairly steady, accounting for about one in five sales in November and unchanged from one year ago.

First published on MortgageLoan.com at: http://www.mortgageloan.com/existing-home-sales-hit-3-year-peak-9323