Figures released Wednesday by the National Association of Realtors revealed that existing home sales surged 5.6% to a seasonally-adjusted annual rate of 5.81 million units last month amid continued recovery in areas in the South ravaged by Hurricanes Harvey and Irma. Economists surveyed by The Wall Street Journal had expected sales would rise a more modest 0.7%, to a 5.52 million annual rate last month.
Sales jumped to an annualized pace of 5.81 million units, 5.8 percent higher than a upwardly revised October level of 5.5 million and the strongest pace since December 2006, NAR reported. The median price nationwide was up 5.4 percent to $248,800.
Americans purchased homes at the fastest pace in almost 11 years, as sales climbed 5.6 percent in November.
"The near-record number of home sales in November continues to show that buyer enthusiasm remains strong even in the face of ongoing price growth", said Duncan R. MacKenzie, CEO of the New York State Association of REALTORS. The median indicates that half of the homes sold for more and half sold for less. All-cash sales rose marginally, to 22 percent, up from 20 percent in October.
The biggest overhaul of the tax system in more than 30 years, which could be signed into law by President Donald Trump soon, will cap the deduction for mortgage interest at $750,000 in home loan value for residences bought from January 1, 2018, through December 31, 2025. That was the 69th consecutive month of year-on-year price gains. The unemployment rate has fallen to a 17-year low, while more people in the younger millennial generation appear to be forming their own households and looking for places to buy.
Despite the recent gains, home resales remain constrained by a chronic shortage of houses at the lower end of the market, which is keeping prices elevated and sidelining some first-time buyers, who accounted for 29 percent of transactions last month.
In November, there were 1.67 million properties for sale, a 9.7 percent decline from a year ago. Inventories are another major issue, particularly for starter homes.
Existing-home sales moved higher for the third straight month in November and reached their strongest pace in nearly 11 years, while new construction of single family homes surged to a 10-year high, according to two new reports.