WASHINGTON: The US housing market continued to boom in November, with existing home sales rising for the third straight month to the highest level in nearly 11 years, according to data released Wednesday.
The multi-year streak of rising prices and falling inventories also continued, adding to concerns about affordability for would-be homeowners, the National Association of Realtors said in the monthly report.
Sales of single-family homes, townhomes, condos and co-ops jumped 5.6 percent last month to an annual rate of 5.81 million, seasonally adjusted, the strongest pace since December 2006.
The result far surpassed analyst expectations, which called for just 5.6 million units.
Lawrence Yun, NAR's chief economist, said market conditions were holding back first-time homebuyers, and the bulk of sales activity came from buyers moving into larger houses who are able to make sizable cash down payments.
"The odds of closing on a home are much better at the upper end of the market, where inventory conditions continue to be markedly better," Yun said in a statement.
Median home prices saw their 69th consecutive increase, rising 5.8 percent over November of last year to $248,000.
Inventories, on the other hand, sank 7.2 percent to 1.67 million existing homes on the market, putting the available stock down 9.7 percent from a year ago, a measure which has fallen for 30 straight months.
At the current sales pace, inventories represented a supply of 3.6 months, down from four months a year ago.
The share of first-time buyers fell three percentage points to 29 percent while the share of all-cash sales rose two points to 22 percent.
"The elevated presence of investors paying in cash continues to add a layer of frustration to the supply and affordability headwinds aspiring first-time buyers are experiencing," Yun said in a statement.
Ian Shepherdson of Pantheon Macroeconomics said the housing market could be affected by this week's passage of the Republican tax plan, which will limit federal deductions of local property taxes and mortgage interest.
But he said, "these changes affect a small part of the national housing market."
On the surge last month, he said, "Presumably, part of this leap in sales is a catch-up after closings were delayed by the hurricanes, but the lagged mortgage applications numbers now suggest sales will rise even further in the early part of next year, perhaps reaching six million," he said in a client note.
"The fundamentals remain favorable, with mortgage rates still low and the labor market very strong."