The National Association of Realtors (NAR) reports that the seasonally adjusted annual rate of existing home sales in November fell 4.3% to 4.9 million from a total of 5.12 million in October. Sales are down 1.2% year-over-year for the month. November marks the first time in 29 months that sales have fallen below year-ago levels.

The consensus estimate called for sales to reach 5.02 million. October sales fell from a September total of 5.29 million.

Housing inventory declined 1.9% in November to 2.09 million homes, which is equal to a supply of 5.1 months, higher than the 4.9-month supply in October. Listed inventory is up 5% year-over-year, when there was a 4.8 month supply available.

According to the NAR, the national median existing home price in November was $196,300, up 9.4% compared with November 2012.

NAR’s chief economist said:

Home sales are hurt by higher mortgage interest rates, constrained inventory and continuing tight credit. There is a pent-up demand for both rental and owner-occupied housing as household formation will inevitably burst out, but the bottleneck is in limited housing supply, due to the slow recovery in new home construction. As such, rents are rising at the fastest pace in five years, while annual home prices are rising at the highest rate in eight years.

Sales of single-family homes fell 3.8% on a seasonally adjusted annual basis from 4.49 million in October to 4.32 million in November. Sales of multifamily homes fell by 7.9%, from an annual rate of 630,000 in October to 580,000 in November.

Foreclosed and short sales accounted for 14% of November sales. Foreclosures sold at an average 17% discount to the November median price, while short sales sold at a discount of 13%.

Existing, non-distressed homes were on the market for an average of 55 days, while foreclosed homes were on the market for an average of 59 days and short sales took a median of 120 days to sell.

The good news from the NAR’s report is that housing inventory continues to rise year-over-year, even though it is still low by historical standards.

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