Americans received good news on the home front last week — the home sales front, that is. Sales of both existing and new homes for November enjoyed upward trends, according to respective reports from the National Association of REALTORS® (NAR) and the Census Bureau.
Sales of single-family homes, townhomes, condominiums and co-ops in November rose 5.6 percent to a seasonally adjusted annual rate of 4.68 million in November, from 4.43 million in October, according to NAR, which chalked up the gains to improved home affordability.
"The relationship recently between mortgage interest rates, home prices and family income has been the most favorable on record for buying a home since we started measuring in 1970," said Lawrence Yun, NAR's chief economist. "Therefore, the market is recovering, and we should trend up to a healthy, sustainable level in 2011."
The national median existing-home price for all housing types was a stable $170,600 in November, up only 0.4 percent from November 2009, which Economic Roundup readers might recall was the initial deadline for the federal first-time buyer tax credit that sparked a marked increase in real estate activity last year. Similarly, distressed homes have maintained a fairly stable market share, accounting for 33 percent of sales in November; they were 34 percent in October and 33 percent in November 2009.
Sales of new single-family homes in November hit a seasonally adjusted annual rate of 290,000, according to the Census Bureau, marking a 5.5 percent gain over October's revised rate of 275,000.
The median sales price of new homes sold in November was $213,000, and the average sales price was $268,700. The estimate of new homes for sale at the end of November was 197,000, representing an 8.2-month supply.
Despite November's gains, it's important to note that November's existing and new home sales performances still have a way to go before they match November 2009's tax credit-inspired boomlet. November's existing home sales were 27.9 percent below the cyclical peak of 6.49 million in November 2009, and new home sales for the month were 21.2 percent below November 2009's estimate of 368,000.
Another key development last week was the news that consumer income and spending both enjoyed gains during November. The latest data from the Bureau of Economic Analysis showed that personal income increased $42.3 billion, or 0.3 percent, and disposable personal income increased $37.8 billion, or 0.3 percent, in November. Likewise, personal consumption expenditures increased $43.3 billion, or 0.4 percent.
Meanwhile, personal savings remained fairly stable, with November's savings reaching $614.8 billion, compared with $622.8 billion in October. Personal saving as a percentage of disposable personal income was 5.3 percent in November, compared with 5.4 percent in October.
This week will see a light financial news calendar thanks to the holidays, starting Tuesday with December's consumer confidence index from the Conference Board. The index is expected to climb to a 56.1 from November's 54.1.
On Thursday the Employment and Training Administration will report initial jobless claims for the week ending December 25. Hopefully, the number of job seekers will be reduced and their efforts will have been rewarded with employment for the holiday.