Existing home sales in November fell far short of sales the previous month according to today's report from the National Association of Realtors® (NAR).  Sales in November were at a seasonally adjusted annual rate of 4.93 million units, the lowest since May's 4.91 million unit pace and a 6.1 percent decline from the previous month.  November sales were still 2.1 percent higher than a year earlier, the second consecutive month of year-over-year gains.

October was a banner month for existing home sales with volume originally reported at an annual rate of 5.26 million units.  Despite the slight downward revision to 5.25 million reported today October remains the best month for sales since September 2013.

Existing home sales are completed transactions which include sales of single-family homes, townhomes, condominiums and co-ops.  Single-family home sales dropped 6.3 percent to a seasonally adjusted annual rate of 4.33 million in November from 4.62 million in October, but remain 2.4 percent above the 4.23 million pace a year ago. Existing condominium and co-op sales declined 4.8 percent to a seasonally adjusted annual rate of 600,000 units in November from 630,000 in October, and are unchanged from a year ago.

Lawrence Yun, NAR chief economist, says sales activity was choppy throughout the country in November and housing inventory began its seasonal decline. "Fewer people bought homes last month despite interest rates being at their lowest levels of the year," he said. "The stock market swings in October may have impacted some consumers' psyche and therefore led to fewer November closings. Furthermore, rising home values are causing more investors to retreat from the market."

The median price of an existing home was $205,300 in November, an increase of 5.0 percent compared to the previous year and the 33^rd consecutive month of year-over-year gains.  Single-family homes had a median price of $206,200 representing an annual increase of 5.6 percent while condominiums were up 1.2 percent on an annual basis to a median of $199,000.

Inventory, as Yun said, was down, falling 6.7 percent to 2.09 million existing homes.  Declining sales, however kept the inventory at a 5.1 month supply, the same as in October.  In November 2013 there were 2.05 million homes for sale.

"Lagging homebuilding activity continues to hamstring overall housing supply and is still too low in relation to this year's promising job growth," says Yun. "Much faster price and rent appreciation - easily exceeding wage growth - will occur next year unless new construction picks up measurably."

The role played by first time homebuyers grew in November, rising from 29 percent of sales to 31 percent.  This is the highest share of first-time buyers since October 2012.  Investors purchased 15 percent of the homes sold in November, the same percentage as in October but down from 19 percent a year earlier.  Sixty-one percent of investors paid cash for the homes they purchased and all cash sales accounted for a quarter of all sales, down from 27 percent in October and 32 percent in November 2013.

NAR President Chris Polychron says Fannie Mae and Freddie Mac's new low downpayment program should improve access to credit for responsible buyers. "NAR applauds Fannie and Freddie's commitment to homeownership by serving creditworthy borrowers who lack the resources for substantial downpayments plus closing costs with its new downpayment program," he said. "The new program mitigates risk with strong underwriting and ensures that responsible buyers have access to safe and affordable mortgage credit. Furthermore, NAR believes lenders must do their part to ensure loans are prudently underwritten and are made available to qualified borrowers."

Six percent of sales in November were of foreclosed property and 3 percent were short sales.  The 9 percent distressed sales total was unchanged from October and was the fourth month this year those sales were in single digits.  Foreclosures sold for an average discount of 17 percent below market value in November (15 percent in October), while short sales were discounted 13 percent (10 percent in October).      

Median marketing time for homes sold in November was 65 days, two days longer than the previous month and nine days more than a year earlier.  Short sales took a median of 116 days to sell, foreclosures 65 days, and non-distressed properties 63 days.  Thirty-two percent of homes sold in November were on the market for less than a month.

Sales fell in all of the nation's regions in November compared to October and were down year over year in two of the four.  Prices rose everywhere on an annual basis. 

In the Northeast sales declined 4.2 percent to an annual rate of 680,000, but remain 4.6 percent above a year ago. The median price in the Northeast was $246,100, 1.3 percent above a year ago.

Midwest sales fell 8.9 percent to an annual level of 1.13 million in November, and are now 1.7 percent below November 2013. The median price in the Midwest was $160,500, up 7.0 percent from a year ago.

Existing-home sales in the South decreased 3.2 percent to an annual rate of 2.09 million but remain 5.0 percent above November 2013. The median price in the South was $176,500, a 5.2 percent annual increase.

Sales in the West dropped 9.6 percent to an annual rate of 1.03 million in November, and remain 1.0 percent below a year ago. The median price in the West was $292,700, up 3.5 percent from November 2013.