The housing market has had a good year, and the latest numbers show that 2017 could close out on a high note. Existing home sales jumped more than five percent last month, reaching levels not seen in 11 years, and with the unemployment rate at a 17-year low, the effects of the economic downturn appear to be firmly in the past.
The seasonally adjusted annual rate of existing home sales hit 5.81 million units in November, second only to December 2006’s rate of 6.42 million. Homes were also selling at a pretty fast clip in November, with the National Association of Realtors reporting that 44% of homes were on the market less than 30 days.
Helping push the real estate market along is the continually low unemployment rate. Nonfarm employment rose by 228,000 jobs, and the unemployment rate remained at 4.1 percent. Economists consider five percent unemployment as fully employed. The residential construction sector added 14,800 jobs last month. The seasonally adjusted unemployment rate for construction workers is just 5.6 percent, up from October’s 5.0 percent.
While all of this is good news, the housing market continues to deal with a lack of supply of homes on the market. November’s unsold inventory translated to a 3.4 month supply of homes, compared to 4.0 months at the same time last year. A six month supply is considered healthy.
The low supply means that home prices will continue to increase. November’s median sales price of $248,000 was the 69th month in a row of year-over-year increases in median home prices. Higher prices are pushing first-time buyers out of the market. In November, just 29% of homes sold went to first-time buyers. October’s rate of first-time buyers was 32%.
Despite the drop in first-time buyers, the housing market continues to do well. How do you see the housing market doing as 2017 comes to a close? How will it fare next year? Let us know your thoughts in the comments.
Recent Comments