NAR: Tax Credit Drives Big +7.4% Gain In November Existing Home Sales

The original deadline for the new homebuyer tax credit was buyers had to close before November 30. The National Association of Realtors said today that deadline drove existing home sales significantly in November. They said existing home sales, which include single family homes, townhomes and condos, rose 7.4% to a seasonally adjusted annual rate of 6.54 million units in November. This is 44.1% higher than the pace in November 2008. They also said that current sales remain at the highest level since February 2007 when they hit 6.55 million. The chart here shows the trend July to November 2009.

NAR chief economist Lawrence Yun expects a temporary sales drop in December and January “while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit, which hopefully will take us into a self-sustaining market in the second half of 2010. In all, 4.4 million households are expected to claim the tax credit before it expires and balance should be restored to the housing sector with inventories continuing to decline.”

NAR’s report shows that first-time buyers purchased 51 percent of homes in November.

Total housing inventory at the end of November declined 1.3 percent to 3.52 million existing homes available for sale, which represents a 6.5-month supply at the current sales pace, down from an 7.0-month supply in October. Raw unsold inventory figures are 15.5 percent below a year ago. The last time there was a lower supply of homes on the market was April 2006 when it was at a 6.1-month supply.

For the second month in a row, sales have risen in all price classes from a year earlier. Prior to October, the only consistent gains were in the lower price ranges. The national median existing-home price for all housing types was $172,600 in November, which is 4.3 percent below November 2008. Distressed properties, which accounted for 33 percent of sales in November, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.

Here’s the NAR’s full report.