Sales of previously owned homes slumped in November to the lowest level in 19 months as a change in industry rules lengthened the amount of time it took buyers to close a deal.
According to a statement released by National Association of Realtors on Tuesday, Existing-home sales fell 10.5% in November from October to a seasonally adjusted annualized rate of 4.76 million. The expectation of the market is 5.32 million according to a survey by Wall Street Journal.
Rising home prices and tighter inventory continued to challenge potential buyers. The national median home price rose to $220,300, which is 6.3% higher than a year before. The increase marks the 45th consecutive month of year-over-year increases, and the trade group said home sales are on track for their best year since the expansion began.
The length of time it took buyers to close a home purchase was 41 days in November, a 5 days increase from a year earlier. Analysts attribute that to a change in regulation that consolidated the closing process and the introduction of new forms that are processed by lenders and title companies.
Higher prices are leaving home purchases further out of reach for some first-time buyers. They accounted for 30 percent of all purchases, the report showed, compared to the 40 percent that is considered more typical.
Now that the central bank has increased its benchmark interest rate for the first time since 2006, mortgage costs may head higher next year. Still, any advance is likely to be slow, as Fed officials have said that the economy will warrant tightening policy only gradually.