Throughout much of 2012, housing market factors have been improving, mirroring economic strengthening. A new report from the National Association of Realtors reveals that existing-home sales increased in November on both a month-over-month and year-over-year basis.
Data from the report shows activity increased 5.9 percent to a seasonally adjusted annual rate of 5.04 million in November, up from 4.76 million recorded the month before. When compared to existing-home sales from November last year, the most recent figure is 14.5 percent higher than the 4.40 million-unit pace from this time a year ago. November marks the highest level of transactions since three year earlier.
"Momentum continues to build in the housing market from growing jobs and a bursting out of household formation," said Lawrence Yun, chief economist of NAR. "With lower rental vacancy rates and rising rents, combined with still historically favorable affordability conditions, more people are buying homes."
High sales throughout the start of 2012 helped lower the inventory of all homes for sale, including foreclosures and short sales which have previously kept home prices from improving. Distressed properties accounted for 22 percent of transactions in November, down 24 percent from October and 29 percent less than in November last year. With less of an inventory, home prices have been posting significant gains in the second half of the year, and November is no exception.
Low inventory helps boost home prices
NAR reports the national median existing-home price for all housing types was $180,600 in November, up 10.1 percent from 12 months ago. This marks the ninth straight month of year-over-year price jumps.
In addition to healthier market conditions shown in mortgage records, rates have remained low, providing high affordability for those looking to make the investment. Homeownership has been comparable in price to renting, while lower rental vacancy rates and higher rent prices have also promoted making the investment.
Recent reports from the government-sponsored enterprise have shown fixed-rate mortgage rates have lingered near record lows set in October then again in November. The agency's recent outlook for the last month of the year also mentions expectations of low mortgage rates throughout 2013.