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Stock Market Wealth Effect Kicks In

The National Association or Realtors reports Existing-Home Sales Soar 5.6 Percent in November to Strongest Pace in Over a Decade.

Lawrence Yun, NAR chief economist, provides this explanation. “Faster economic growth in recent quarters, the booming stock market and continuous job gains are fueling substantial demand for buying a home as 2017 comes to an end."

As evidenced by a subdued level of first-time buyers and increased share of cash buyers, move-up buyers with considerable down payments and those with cash made up a bulk of the sales activity last month. The odds of closing on a home are much better at the upper end of the market, where inventory conditions continue to be markedly better.”


  • The median existing-home price for all housing types in November was $248,000, up 5.8 percent from November 2016 ($234,400). November’s price increase marks the 69th straight month of year-over-year gains.
  • Total housing inventory at the end of November dropped 7.2 percent to 1.67 million existing homes available for sale, and is now 9.7 percent lower than a year ago (1.85 million) and has fallen year-over-year for 30 consecutive months. Unsold inventory is at a 3.4-month supply at the current sales pace, which is down from 4.0 months a year ago.
  • First-time buyers were 29 percent of sales in November, which is down from 32 percent both in October and a year ago.

Regional Single-Family Sales by Price

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Supply in Months

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  • Supply in months is calculated as Seasonally adjusted supply / seasonally adjusted sales
  • r: Revised
  • p: Preliminary


  1. Sales up, first-time buyers down.
  2. It's pretty easy to spot what's happening. New buyers are being increasingly squeezed out of this market. A wealth effect has kicked in with stock market euphoria.
  3. This is likely to reverse sharply when the stock market corrects.
  4. Economists will be wondering: "What happened?"

Mike "Mish" Shedlock