Existing home sales surge 7.4% in November
* Existing home sales jumped 7.4% to a seasonally adjusted annual rate of 6.54 million in November. That was up from 6.09 million a month earlier and well above forecasts for a reading of 6.25 million.
* Regionally, sales were strong across the board. They rose 4.8% in the South, 6.6% in the Northeast, 8.4% in the Midwest, and 10.6% in the West. By property type, single family sales surged 8.5%, while condo and coop sales were flat on the month.
* The raw number of homes for sale slipped to 3.518 million from 3.565 million in October. That was down 15.5% from a year earlier. The months supply at current sales pace indicator of inventory dropped to 6.5 from 7. That's the lowest since December 2006. Median prices were roughly unchanged -- $172,600 in November vs. $172,200 in October. That was a decline of 4.3% from a year earlier.
Santa delivered more good news for the housing market today. November home sales easily topped estimates, with strength evident in all regions of the country. Moreover, the inventory of homes for sale continues to dwindle. That shows that distressed properties are being snapped up by investors and single-family buyers, an encouraging sign.
In the big picture, I've been saying for a long time that falling home prices would eventually "fix" the housing crisis. We needed to see prices fall to make ownership competitive with renting again, and to restore the normal relationship of house prices to income. That has now happened, and you're seeing buyers come out of the woodwork as a result. The home buyer tax credit and the Fed's meddling in the mortgage market are also helping the process along.
In short, my call in the spring that the housing market was bottoming out appears right on target. We have since seen sales rise, inventories decline, and construction activity stabilize. Look for pricing to follow later in 2010.