It would take nearly a year to sell all the existing homes currently on the market, according to November sales statistics released today by the National Association of Realtors (NAR), which reported that existing-home sales fell to a seasonally adjusted level of 4.49 million units last month.
That growing amount of existing-home inventory is the result of a slow November, when existing-home sales dropped 10.6% compared to the same month one year ago. The monthly numbers are almost as bad; existing-home sales fell 8.6% between October and November.
Meanwhile, the median sales price plummeted 13.2%, to $181,300.
Charles McMillan, NAR's president, urged Congress to spend money to stop such declines in sales and home values. "We need more than low interest rates to encourage enough buyers to enter the market and meaningfully draw down inventory, which would stabilize home prices," he said. "That, in turn, would help the economy to recover."
The housing sector certainly is suffering. "The November home sales report illustrates the ultimate risk in a situation where negative business cycle momentum persists for an excruciating length of time," said Brian Bethune, chief U.S. financial economist for IHS Global Insight in Lexington, Mass. "The home sales market has been in recession for over three years. Builders have been reducing supply since the first quarter of 2006, and housing starts and permits were further collapsed to record low levels in November. The housing industry in the United States is in the process of reducing capacity to dangerously low levels."
Alison Rice is senior editor, online, at BUILDER magazine.