Existing home sales in November tumbled 6.1%, the biggest drop since July 2010, down to a seasonally adjusted annual rate of 4.93 million.
This was well below analyst expectations of a 1.1% decline, ending five months of 5 million SAAR sales.
It wasn’t weather – analysts noted that the November weather was mild and should have given a boost to sales.
“While the headlines often point to first-time buyers’ reluctance to enter the market as a catalyst to the sluggish housing recovery, today’s report shows inventory needs to climb before it can support more interested buyers,”Quicken Loans Vice President Bill Banfield said. “As homeowners gain trust in the economy, they will be more comfortable leaving their current mortgage and entering the market, thus driving up inventory to support further demand.”
November’s weakness is broad based, with all four regions showing single-digit monthly declines.
Lawrence Yun, chief economist for the National Association of Realtors, blamed the stock market.
“The stock market swings in October may have impacted some consumers’ psyche and therefore led to fewer November closings,” Yun said. “Furthermore, rising home values are causing more investors to retreat from the market.”