Sales of new houses rose in November to the highest level in more than two years, the latest sign that the real-estate market is helping lift the U.S. economy.
Purchases climbed 4.4 percent to a 377,000 annual pace, the most since April 2010, following a revised 361,000 rate in October, the Commerce Department reported today in Washington. The median estimate of 71 economists surveyed by Bloomberg called for sales to increase to 380,000.
Low mortgage rates and dwindling foreclosures are stabilizing prices and attracting buyers more than three years after a recession that was fueled by the industry’s collapse. Growing demand coupled with less inventory has given a boost to Toll Brothers Inc. and other companies, which are competing for buildable lots.
“The housing market’s in a steady recovery that’s likely to continue,” said Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC in New York. “We’re probably in the early stages of this positive feedback loop” of cheap credit, tight inventory and rising prices, he said. “It’s not likely to get to the heydays of the last boom but the housing market is doing well.”
Economists’ estimates ranged from a sales rate of 360,000 to 398,000.
Other reports today showed jobless claims dropped last week and readings of consumer confidence showed Americans remained upbeat about the current state of the economy while growing more concerned about next year.
Applications for jobless benefits decreased 12,000 to 350,000 in the week ended Dec. 22, according to Labor Department figures. Claims in 19 states and territories were estimated because government office closures on Dec. 24 prevented a complete count, a Labor Department spokesman said as the figures were released.
The Bloomberg Consumer Comfort Index was little changed at minus 32.1 in the period ended Dec. 23 from minus 31.9 in the prior week, a drop that was within the margin of error of 3 percentage points. The gauge, which is based on current conditions, was less than a point from an April reading that was the highest since March 2008.
The New York-based Conference Board’s measure of consumer confidence dropped more than forecast in December, another report showed. The gauge fell to a four-month low of 65.1 this month from 71.5 in November as Americans turned more pessimistic about the outlook for growth.
Stocks fell as lawmakers returned to Washington to resume budget talks. The Standard & Poor’s 500 Index dropped 0.7 percent to 1,410.52 at 10:27 a.m. in New York.