The healthy Trump-fueled economy has inspired an increasing number of Americans to purchase homes, as evidenced by the fact that sales climbed 5.6 percent in November.
This is the fastest pace in nearly 11 years, according to the National Association of Realtors, which announced on Wednesday that sales of existing homes rose last month to a seasonally adjusted annual rate of 5.81 million units.
The unemployment rate has fallen to a 17-year low, and now that they have jobs, more young people are looking to buy their first homes and, hopefully, establish families.
At the same time, there’s an increasing vulnerability in the U.S. real estate market, as the number of listings has been declining on a yearly basis for the past two-and-a-half years.
According to a report in The Associated Press, “[i]n November, there were 1.67 million properties for sale, a 9.7 percent decline from a year ago. There is only 3.4 months’ supply of homes on the market, the lowest level ever tracked by the Realtors.”
The limited inventory is one of the reasons why home values have gone up faster than wages, but this is an especially-concerning situation on the West Coast, where the high cost of housing has contributed to a homeless epidemic.
The AP report noted that the median home sales price increased 5.8 percent from a year ago to $248,000 in November. That price increase is more than double the rise in average hourly earnings. Those most hard-hit live in coastal cities such as San Diego, Los Angeles, San Francisco, and Portland.
The problem is not really affecting the rest of the country; home sales rose last month in the Northwest, Midwest and South. In addition, some of the cost pressures have been offset by relatively low mortgage rates.
The average rate on 30-year fixed-rate U.S. mortgages was 3.93 percent last week, slightly better than the 4.16 percent rate a year ago, according to mortgage buyer Freddie Mac.
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