Existing-home sales rise for a second month, top estimates
Sales of previously owned homes rose for a second straight month and exceeded forecasts in November, suggesting consumer demand is picking up as price gains moderate amid more generous inventories.
Contract closings increased from the prior month to an annual rate of 5.32 million, the National Association of Realtors said Wednesday, as the median sales price rose 4.2% from a year ago. Meanwhile, the inventory of available homes rose 4.2% from a year earlier, the fourth straight increase.
The increase, which follows upbeat housing-starts data this week, indicates a steadying market after months of weaker reports pointed to a decline. Despite the strength, prospective buyers still face headwinds including higher prices and mortgage rates.
The data follow a government report Tuesday showing new-home construction rebounded in November and permits rose to a seven-month high, a sign of stabilizing demand for housing despite higher prices and borrowing costs. Economists surveyed by Bloomberg had projected a 5.2 million pace for sales.
The surprising strength joins other indicators that suggest U.S. economic growth will hold up this year and next, albeit at a more moderate pace. Federal Reserve officials are projected to raise interest rates at the conclusion of their meeting later Wednesday though may slow their pace of hikes in 2019. Even with the latest increase in sales, purchases were down 7% from a year earlier, the most since May 2011, NAR said.
Increasing inventory is helping first-time buyers, whose share of the market increased to 33% from 31% in October, NAR Chief Economist Lawrence Yun said at a briefing in Washington.
Home purchases rose in three of four regions: The Northeast, Midwest and South. The West fell. At the current pace, it would take 3.9 months to sell all homes on the market, compared with 4.3 months in October; Realtors see anything below a five-month supply as a sign of a tight market.
The level has risen from a year earlier. Existing-home sales account for about 90% of U.S. housing and are calculated when a contract closes. New-home sales make up the remainder of the market and are seen as timelier, because they're counted when contracts are signed.