Sales of Existing Homes Up 3.2% in November

Sales of existing homes advanced 3.2% in November, with a big jump in activity in the South spurring the fastest growth rate in 11 months, a real estate trade group reported Wednesday.

The National Assn. of Realtors said sales of existing single-family homes rose to a seasonally adjusted annual rate of 3.59 million units last month, the best performance since sales reached a rate of 3.92 million units in December, 1988.

Sales were up 3.2% in the West to an annual rate of 640,000 units. Though California accounts for most of the western region, the regional increase came from stronger sales in Nevada and Washington, where major urban housing markets are booming.

“The markets were soft in the other western states, including California,” said Glenn E. Crellin, an economist for the realtors’ group.

The November increase followed a 1.1% decline in October. It was the biggest percentage gain since a 4.5% rise in August.

Analysts credited declining mortgage rates for the upturn in sales activity. But they said housing sales presented a mixed picture, with some areas of the country such as the Northeast hurting because of a rapid surge in prices in the past several years.

“Some large, high-cost markets have experienced some softening this year. However, many smaller, secondary cities are quite strong,” said John Tuccillo, chief economist for the realtors.

He said the disparity in sales between high-cost areas and more moderately priced markets should continue in 1990.

Sluggish sales in high-cost areas have prompted some fears of a housing recession, but Norman D. Flynn, president of the realtors’ group, said the naysayers would be proven wrong.

“People who are predicting hard times for housing are not considering how much prices rose in high-cost areas over the past few years,” said Flynn, who cited the Northeast, where the median price is up 85% from five years ago.

Tuccillo predicted that falling mortgage rates would continue to boost home sales in coming months. The national average for fixed-rate mortgages dipped to 9.69% last week, down from a high in March of 11.22%.

The median price for homes sold in November edged up 0.4% to $93,000.

The West pulled ahead of the Northeast in November as the region with the highest-priced homes, recording a median resale cost of $150,200 last month. The Northeast was second with a median price of $145,800, followed by the South at $82,400 and the Midwest at $70,900.