Dive Brief:
- Existing home sales plunged 10.5% in November to a seasonally adjusted annual rate of 4.76 million, the National Association of Realtors reported Tuesday.
- November's rate marked a 19-month low, as all four regions saw sales declines between October and November.
- The median existing-home price in November was $220,300 — 6.3% higher than November 2014 and slightly up from the median price of $219,600 in October. November was the 45th consecutive month of year-over-year gains in existing-home prices.
Dive Insight:
November's results came in well below analyst expectations, as economists had predicted November's rate would slip only to 5.32 million units, according to The Wall Street Journal.
The slip in existing home sales follows a less severe decline in October, when the NAR reported sales fell 3.4%. Another disappointing result: The share of first-time buyers in November dipped to 30% after reaching 31% in October.
NAR Chief Economist Lawrence Yun attributed a significant portion of November's sales numbers to the new Know Before You Owe rule, which is a regulation that came into effect in October with the goal of simplifying homebuying paperwork. According to Yun, the new rule led to longer closing times as some lenders and closing companies are taking more caution when selling homes.
"It's possible the longer timeframes pushed a latter portion of would-be November transactions into December," Yun said in a release.
Apart from the effect of the new regulations, Yun also cited the ongoing concerns of "sparse inventory and affordability issues," which he said "continue to impede a large pool of buyers' ability to buy."
Existing sales represent the largest segment of the home sale market. So far this month, housing market reports have been mixed. Homebuilder confidence dipped another one point in December after a three-point decline in November. However, the Commerce Department reported housing starts surged 10.5% in November to a 1.17 million annualized rate, up from a 1.06 million rate in October and 16.5% higher than November 2014. New home sales data will be released on Wednesday.
