U.S. sales of existing homes were up 4 percent in November to an annual rate of 4.42 million units, according to the National Association of Realtors (NAR), suggesting that a housing recovery is beginning.
Sales were up from an annual rate of 4.25 million units in October and 12.2 percent above 3.94 million units in November 2010.
“Sales reached the highest mark in 10 months and are 34 percent above the cyclical low point in mid-2010. A genuine sustained sales recovery appears to be developing,” said Lawrence Yun, NAR's chief economist, in a statement. “We've seen healthy gains in contract activity, so it looks like more people are realizing the great opportunity that exists in today’s market for buyers with long-term plans.”
Total housing inventory fell 5.8 percent in November to 2.58 million existing homes. The median existing home prices was $164,200, down 3.5 percent from a year ago. Distressed homes, including foreclosures and short sales, were 29 percent of sales in November, up from 28 percent in October and down from 33 percent in November 2010.
All-cash sales, in which no mortgage is taken, accounted for 28 percent of purchases in November, down slightly from 29 percent in October and 31 percent in November 2010. First-time buyers accounted for 35 percent of transactions in November, up from 34 percent in October and 32 percent in November 2010.
All U.S. regions saw month-over-month sales gains, with the Northeast up 9.8 percent, the Midwest up 4.3 percent, the South up 2.4 percent and the West up 3.6 percent.
Gains were partially attributed to low mortgage rates and affordable pricing, although lender underwriting standards have tightened.
“With record low mortgage interest rates and bargain home prices, NAR’s housing affordability index shows that a median-income family can easily afford a median-priced home,” said Moe Veissi, president of NAR, in a statement.
Separately, the NAR released revised sales data since 2007, indicating that the housing downturn was worse than previously reported. Average annual sales were 4.42 million units, down 14.3 percent from the previous estimate of 5.16 million units.
During the market's low point, the annual rate of sales totaled 3.30 million in July 2010, down from 3.86 million units.
The revisions were a result of discrepancies in recorded sales data, which may have led to some sales being recorded twice, as well as differences between the multiple listing service and the U.S. Census benchmark.