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Sales of pre-owned homes stalled out in November, plunging to their slowest pace in half a year only one month after hitting a 2014 high.
The National Association of Realtors (NAR) reported Monday that existing-home sales fell 6.1 percent from October to November, landing at a seasonally adjusted annual rate of 4.93 million. The association also cut October's estimated sales rate slightly to 5.25 million.
"Fewer people bought homes last month despite interest rates being at their lowest levels of the year," NAR Chief Economist Lawrence Yun 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."
Despite the stumble, home resales in November were still up 2.1 percent from year-ago levels, making it just the second month in 2014 to see sales rise year-over-year.
It's been a year of starts and stops for home sales, which have struggled under the weight of rising mortgage rates (a trend that has reversed in recent months), a tighter lending environment, declining affordability, and a lack of housing stock available for buyers.
In November, the total inventory of existing homes for sale was 2.09 million, NAR estimates, down 6.7 percent from October.
"Lagging homebuilding activity continues to hamstring overall housing supply and is still too low in relation to this year's promising job growth," Yun said. "Much faster price and rent appreciation—easily exceeding wage growth—will occur next year unless new construction picks up measurably."
About one-quarter of resale transactions last month were made entirely in cash, down from nearly one-third last year, NAR reported. Individual investors, who account for many cash sales, were responsible for 15 percent of total sales.
Meanwhile, the percentage of first-time homebuyers climbed slightly to 31 percent, the highest share since October 2012.
With Fannie Mae and Freddie Mac opening the door for low down payments, the association hopes to see the share of first-time homebuyers pick up to a more normal level.
"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," said NAR President Chris Polychron. "The new program mitigates risk with strong underwriting and ensures that responsible buyers have access to safe and affordable mortgage credit."
Existing-home sales fell month-over-month in November in all four census regions, led by a 9.6 percent drop in the West to a yearly rate of 1.03 million. That was followed by declines of 8.9 percent in the Midwest (to 1.13 million), 4.2 percent in the Northeast (to 680,000), and 3.2 percent in the South (to 2.09 million).
Compared to a year ago, sales were up in the Northeast and South, outperforming November 2013 by 4.6 percent and 5.0 percent, respectively. At the same time, sales were down 1.7 percent in the Midwest and 1.0 percent in the West.
