Home Resales Dip 0.2% in November

Despite a slowdown in November, sales of existing homes are finishing 1997 at a record pace and economists are looking for next year to be nearly as good, according to figures released Monday.

Single-family homes sold at a seasonally adjusted annual rate of 4.38 million units in November, the National Assn. of Realtors said Monday. That’s just 0.2% lower than October’s 4.39-million rate--the best since the group began tracking sales in 1968.

The trade association projected that sales for all of 1997 will total 4.31 million, also the best in 29 years, and it forecast 4.09 million sales for 1998.

“We don’t expect the extraordinary year we’ve had in 1997. But . . . it still will be an excellent year for housing,” said economist Paul Taylor of America’s Community Bankers.

California’s home sales for November mirrored those of the nation’s. They fell 7.3% from October to a seasonally adjusted annualized rate of 567,090 homes, according to the California Assn. of Realtors.

The drop in part reflects the strength of sales in October, when more homes were sold in California than in any month since February 1989. On a year-over-year basis, November’s sales pace was 14.1% higher than in the same month last year.

The median price of an existing single-family home--the price at which half the homes sold for more than that amount and half sold for less-- sold in November was $193,750, up 1.1% from October and 10.4% above the median price in November 1996.

“Sales and price appreciation in Northern California continue to skyrocket, and it looks like Southern California is once again solidly in orbit,” said Tim Corliss, president of the state real estate group.

Home sales have been supported by low mortgage rates and strong economic growth, which pushed the nation’s jobless rate to a 24-year low of 4.6% in November.

“The housing market could not be stronger than it is right now,” said economist David Lereah of the Mortgage Bankers Assn. of America. “Everything was aligned in 1997--falling interest rates . . . a very robust economy . . . a stock market that provided substantial wealth gains and soaring consumer confidence.”

Thirty-year, fixed-rate mortgages averaged 7.21% in November, the lowest in 21 months. They fell to about 7.1% this month as skittish investors fled Asian turmoil for the safety of U.S. government securities.

The strong sales are giving homeowners a dividend. Home values are appreciating three times faster than the overall inflation rate of about 2%.

The U.S. median price of an existing home was $124,400 in November, up 6% from a year ago.

By region, sales fell 2.7% in the Midwest to a seasonally adjusted 1.09 million units in November and 1.6% in the Northeast to a rate of 630,000 units. Sales were unchanged in the West at a rate of 990,000 units. They rose 1.8% in the South to 1.67 million units.

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Existing-Home Sales

Seasonally adjusted annual rate, in millions of units:

Nov.: 4.38

Source: National Assn. of Realtors