November Sales Of Homes Fell Less Than 1% --- Year's Existing-Home Sales Should Be Best Since '68; Rate May Ease in 1998
The housing market is about to close one of the best sales years ever. But 1998's housing market may lack some of this year's zing.</br></br>Yesterday, the National Association of Realtors said sales of existing homes in November fell less than 1% to a seasonally adjusted rate of 4.38 million homes, compared with 4.39 million in October and 4.06 million in November 1996.</br></br>Barring unexpectedly bleak results for December, the trade group expects total 1997 existing-home sales to top 4.2 million, the highest number since the group began tracking sales in 1968 and above last year's 4.09 million. Meanwhile, the group estimates that the median sale price of existing homes will have risen 4.9% during 1997, more than double the inflation rate. Half of all homes sell for above the median price, while half sell for less.</br></br>The surge has surprised analysts, who at the beginning of 1997 were expecting home sales to slip a bit. But a strong economy boosted employment levels and consumer confidence, and mortgage rates were consistently low. Fat gains in the stock market also made Americans more willing to spend more money on a big purchase like a home.</br></br>Perhaps most important, the American population has moved into prime home-buying age groups. Today's baby boomers are now between the ages of 33 and 51 years old. At the younger end of that spectrum, homeowners typically buy a first home or sell a smaller first home to trade up to a house with enough room for their growing families. At the older end, empty-nesters are inclined to sell their big homes and buy smaller but fancier homes near the golf course.