Existing-Home Sales Drop For Third Straight Month
The number of people who bought existing U.S. homes in November declined for the third straight month. Higher mortgage rates have made home-buying more expensive, while the lingering effect of the October government shutdown might have deterred some sales.
Home resales fell 4.3 percent to an annual rate of 4.90 million, the National Association of Realtors said Thursday. That was the weakest pace since December 2012 and the first time since April that the pace has slipped below 5 million.
Still, the Realtors' group predicts that total sales this year will be 5.1 million. That would be the strongest since 2007, when the housing bubble burst. But it's still below the 5.5 million generally associated with healthy housing markets.
Home sales could rebound in the new year if the strengthening job market lifts incomes and builds confidence in the economy.
Over the summer, resales reached a pace of 5.39 million, the fastest in four years. But sales began to slow in September as the costs of buying a home rose.
Mortgage rates are nearly a full percentage point higher than in the spring, when they were near record lows. And a limited supply of homes on the market has driven up prices. The combination has made home buying less affordable, particularly for first-timers.
Sales in November were 1.2 percent lower than in the same month a year ago, the first year-over-year decline in 29 months.
The Realtors' group said the main factor in the sales decline was less affordability. But it also cited fallout from the 16-day partial closure of the federal government, which might have delayed some sales.
The median sales price of an existing home was $196,300 in November. That was a slight decrease from October but 9.4 percent higher than a year ago.
Home-buying has declined 10.1 percent in Western states during the past 12 months. That drop has been partially offset by stronger sales in the Northeast and South.