Previously owned U.S. home sales declined for the third consecutive month in November to the lowest level of the year as rising mortgage rates and a limited supply of properties discouraged buyers.
Purchases dropped 4.3% to a 4.9 million annual rate, the National Association of Realtors reported today in Washington. The median forecast of economists in a Bloomberg survey called for the pace to slow to 5.02 million. The group still projects 2013 will be the best year for the industry in seven years, with an estimated 5.1 million properties sold.
Rising prices and borrowing costs have put homes out of reach for some first-time buyers, indicating faster job and income growth are needed to give residential real estate a bigger push. At the same time, the Federal Reserve’s decision yesterday to begin scaling back record stimulus may encourage purchases before rates head even higher.
“We’ve seen a trend of low numbers but I’m still not worried,” Anika Khan, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, said before the report. “If buyers expect rates to increase, which we do expect at some point, those would-be buyers that have access to credit are going to jump into the market.”
Estimates in the Bloomberg survey of 75 economists ranged from 4.9 million to 5.21 million.
Another report today showed applications for unemployment benefits unexpectedly rose last week to an almost nine-month high, showing fluctuation in the filings that typically occurs around the year-end holidays.
Jobless claims climbed by 10,000 to 379,000 in the period ended Dec. 14, the most since the end of March, the Labor Department said.
The median price of an existing home rose 9.4% to $196,300 in November from $179,400 a year earlier, today’s report showed.
The number of existing properties for sale dropped 0.9% from October to a 2.09 million rate, the fewest since March. At the current pace, it would take 5.1 months to sell those houses, compared to 4.9 months in the previous three months. Inventory was up 5% from a year earlier.
Purchases of single-family homes decreased 3.8% to an annual rate of 4.32 million. The sales pace of multifamily properties including condominiums dropped 7.9% to 580,000.