Last month’s existing home sales slid to the slowest pace in more than a year and a half, and the new integrated disclosure rule was a likely culprit.
The annual rate of existing sales of
single-family homes, townhomes, condominiums and co-ops was a seasonally adjusted 4.76 million in November.
That turned out to be the worst showing since April 2014, when the seasonally adjusted annual rate of completed transactions came in at 4.75 million.
The data was reported Tuesday by the National Association of Realtors.
Last month’s pace of home sales tumbled 11 percent from the downwardly revised rate in October and was four percent worse than in November 2014.
The year-over-year decline was the first since September 2014.
A more than 15 percent month-over-month decline was reported for the Midwest, leaving the seasonally adjusted annual rate there at 1.10 million.
The West saw a 14 percent drop from October to an 0.99 million rate, while the Northeast was down nine percent to an 0.69 million rate, and the South fell
six percent to a 1.98 million rate.
On just single-family U.S. homes, seasonally adjusted sales declined 12 percent to 4.15 million.
Among multiple factors impacting the latest deterioration was the TILA-RESPA integrated disclosure rule that went into effect on Oct. 3, according to NAR Chief Economist Lawrence Yun. He said that more time might need to be allowed for closings.
But as long as turnaround doesn’t lengthen further, Yun speculates that last month’s missed closings will be pushed into December, “and November’s large dip will be more of an outlier.”
While TRID might have been the primary factor, the economist noted that other issues were also at play.
“Sparse inventory and affordability issues continue to impede a large pool of buyers’ ability to buy, which is holding back sales,” Yun explained in the report. “However, signed contracts have remained mostly steady in recent months, and properties sold faster in November. Therefore it’s highly possible the stark sales decline wasn’t because of sudden, withering demand.”
But despite the longer closing times, the average property stayed on the market 54 days last month, less time than the 57 days in October and the 65 days in November.
The most-recent activity left
2.04 million existing homes for sale, two percent fewer than in November 2014.
It would take 5.1 months to clear out the current inventory based on the current sales rate, lengthening from 4.8 months in October.
NAR reported the median existing home price at $220,300 for November, up more than six percent from a year earlier and the 45th consecutive year-over-year gain.
A separate report from the Federal Housing Finance Agency indicated that its Home Price Index was 227.5 in October, inching up less than a percent from the previous month but climbing 6.1 percent from the same month in 2014.
FHFA noted that there was a 1.2 percent month-over-month in the HPI for the East South Central region, the biggest of any region. The worst month-over-month change was an 0.5 percent decline in the New England region.
On a year-over-year basis, the Mountain region rose 8.9 percent, the most of any area, while a 2.9 percent rise in New England was the smallest.
NAR reported that first-time-buyer share was 30 percent last month, worsening from 31 percent in October.
November’s all-cash share was 27 percent, and the distressed-sales share was nine percent.
