The frigid weather may have arrived just as winter is set to begin, but home sales were anything but cold in November, according to recent reports.
In its December National Housing Report, RE/MAX found a year-over-year increase of 19 percent for home sales during the month of November, while Redfin found a similar rate of home sales gains (20 percent) for the month.
Why were home sales so strong in November compared with last year? For one, they usually aren’t, according to RE/MAX. Their 19 percent increase went against the usual seasonal trend of slowdowns on the eve of winter during the eight-year history of their National Housing Report.
The answer to the question may lie in the fundamentals. Inventory fell by 17 percent year-over-year in November, and the median sales price for the 53 markets measured in RE/MAX’s report came in at nearly 9 percent higher over-the-year in November (up to $220,000).
“The continued decline of inventory and talk of rising interest rates may have contributed to November's surge of home sales,” said Dave Liniger, RE/MAX CEO, Chairman of the Board and Co-Founder. “Over the past 11 months, the majority of markets have seen home prices return to their pre-recession levels, reaffirming that 2016 has been the best year for the housing market since the recession.”
Both Redfin and RE/MAX reported similar declines in the number of days on the market for homes in November—for Redfin, the number fell from 56 a year ago down to 50 in November 2016, while for RE/MAX it was 65 days last year down to 59 this year.
According to Redfin, one of the drivers behind the increased home sales in November, was the fact that the TRID rule went into effect in October 2015, subsequently slowed down sales for the following month.
“Last year we saw a temporary slump in November sales as new mortgage industry regulations went into effect and delayed some closings,” said Redfin chief economist Nela Richardson. “Now, those regulatory hurdles have largely been resolved but the market is by no means back to normal.”