U.S. home sales rise 5.6% in November from previous month
Sales of previously owned U.S. homes last month rose 5.6% over the previous month but remained considerably weaker than the brisk pace set last year, when tax credits for buyers fueled the market.
The National Assn. of Realtors said homes sold at a seasonally adjusted annual rate of 4.7 million houses and condominiums. Although up from October, the number was a 27.9% drop from November 2009.
The industry group said 33% of the homes sold in November were distressed sales. These include foreclosures and short sales, in which banks agree to sell homes for less than the value of the mortgages on them.
Several economists have said they expect the U.S. housing market to remain constrained by scaled-back bank lending and by a poor economy dampening prospects for buyers.
November’s sales pace was running at about the same rate as it was during the first quarter of 2009, when the economy was still sharply contracting, said Paul Ashworth, an economist for consulting firm Capital Economics.
“Put in that context, it would be more than a stretch to characterize this latest uptick as a meaningful recovery,” he said. “The more appropriate description is that housing is still bouncing along the bottom.”
Patrick Newport, an economist for research firm IHS Global Insight, said the increase in sales probably was a result of an improved economy and the fallout from the expiration of the tax credits weakening. But more job growth and increased lending by banks will be necessary next year to help the housing market improve substantially, he said.
“The key for housing in 2011 and thereafter is employment growth,” Newport said. “But just as critical is an easing of credit” among banks to provide more loans.
The national median home price was $170,600 in November, up 0.4% from November 2009.
Total housing inventory at the end of November fell 4% to 3.71 million existing homes available for sale, which represents a 9.5-month supply at the current pace, a decline from the 10.5-month supply in October.
