Two major elements of the housing market - existing-home sales and new construction - are headed in opposite directions.
Recent data from the National Association of Realtors indicated that total existing-home sales, including single-family houses, townhomes, condominiums and co-ops, dipped 4.3 percent from October to November. The current seasonally adjusted annual rate in now 4.90 million units.
"Home sales are hurt by higher mortgage interest rates, constrained inventory and continuing tight credit," said Lawrence Yun, NAR chief economist. "There is a pent-up demand for both rental and owner-occupied housing as household formation will inevitably burst out, but the bottleneck is in limited housing supply, due to the slow recovery in new home construction. As such, rents are rising at the fastest pace in five years, while annual home prices are rising at the highest rate in eight years."
NAR reported that the total housing inventory by the end of November was only 2.09 million units, down 0.9 percent month-over-month. Now, there is only a 5.1-month supply given the recent sales pace. At the same time in 2012, however, there was a 4.8-month supply.
New construction ticks up
While existing-home sales are headed in a downward direction, new construction is doing the exact opposite. According to a joint release from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, housing starts in November increased 22.7 percent compared to October.
This past month's total was at a seasonally adjusted annual rate of 1,091,000 starts, which is also 29.6 percent above the same time in 2012. Building permits also were on the rise, with November's tally up 3.1 percent month-over-month.
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