In November, the Federal Reserve reduced its benchmark rate for the third time this year. This action was widely anticipated by the market. Mortgage rates have remained steady this month but still are down more than 1 percent from last year at this time. Residential new construction activity continues to rise nationally. The U.S. Commerce Department reports that new housing permits rose 5% in October to a new 12-year high of 1.46 million units.
While many economic signs are quite strong, total household debt has been rising for twenty-one consecutive quarters and is now $1.3 trillion higher than the previous peak of $12.68 trillion in 2008.
While delinquency rates remain low across most debt types (including mortgages), higher consumer debt loads can limit future household spending capability and increase risk if the economy
slows down.
Locally, New Listings in our area increased 8.7 percent to 926, compared to November 2018. For year-to-date, that puts New Listings at 5.7 percent increase to 13,341.
Pending Sales were up 30.2 percent to 846 for November, with a year-to-date increase of 9.7 percent with 10,283 Pending Sales.
Inventory levels shrank 15.5 percent to 2,656 units. Inventory concerns are looking to persist into 2020, which is a sentiment echoed by NAR’s Chief Economist Lawrence Yun. “Real estate is on firm ground with little chance of price declines,” said. “However, in order for the market to be healthier, more supply is needed to assure home prices as well as rents do not consistently outgrow income gains.”
Prices continued to gain traction. The Median Sales Price increased 13.2 percent to $215,000. Days on Market was up 2.0 percent to 50 days. Sellers were encouraged as Months Supply of Inventory was down 23.7 percent to 2.9 months.