Home Re-Sales Jump Amid Mixed Economic Data
U.S. home resales rose sharply in November to their fastest pace in three years while a separate gauge of future U.S. economic activity fell in November and factory activity in the U.S. mid-Atlantic region accelerated.
The National Association of Realtors said on Thursday that existing home sales climbed 5.9 percent last month to a seasonally adjusted annual rate of 5.04 million units.
That was the fastest since November 2009, when a federal tax credit for home buyers was due to expire. Sales were well above the median forecast of a 4.87 million-unit rate in a Reuters poll.
The U.S. housing market tanked on the eve of the 2007-09 recession and has yet to fully recover, but steady job creation has helped the housing sector this year, when it is expected to add to economic growth for the first time since 2005.
NAR economist Lawrence Yun said superstorm Sandy, which slammed in the U.S. East Coast in late October and disrupted the regional economy for weeks, had only a slight negative impact on home resales.
The NAR expects some purchases delayed by the storm to add a slight boost to resales over the next few months, Yun said.
Nationwide, the median price for a home resale was $180,600 in November, up 10.1 percent from a year earlier as fewer people sold their homes under distressed conditions compared to the same period in 2011. Distressed sales include foreclosures.
The nation's inventory of existing homes for sale fell 3.8 percent during the month to 2.03 million, the lowest level since December 2001.
At the current pace of sales, inventories would be exhausted in 4.8 months, the lowest rate since September 2005.
Distressed sales fell to 22 percent of total sales from 29 percent a year ago.
The share of distressed sales, which also include those where the sales price was below the amount owed on the home, was also down from 24 percent in October.
Economic Gauge Falls
A gauge of future U.S. economic activity fell slightly in November, suggesting a slowdown in growth in the near term.
The Conference Board said on Thursday its Leading Economic Index slipped 0.2 percent to 95.8 last month, after increasing 0.3 percent in October.
Economists polled by Reuters had expected the index to fall 0.2 percent after two straight months of gains.
"The indicators reflect an economy that remains weak in the face of strong domestic and international headwinds as it faces the fiscal cliff," said Ken Goldstein, an economist at the Conference Board.
"Growth will likely be slow through the early months of 2013," he added.
The fiscal cliff refers to automatic government spending cuts and higher taxes that could suck about $600 billion from the economy early next year unless the U.S. Congress and the Obama administration can agree on a less drastic plan to cut the budget deficits.
Business confidence has taken a dive in recent months on fears of tighter fiscal policy.
Mid-Atlantic Factory Activity Accelerates
A separate poll showed that factory activity in the U.S. mid-Atlantic region accelerated in December, bouncing back from the previous month's slump as new orders picked up.
The Philadelphia Federal Reserve Bank said its business activity index rose to 8.1 from minus 10.7 in November, easily topping economists' expectations for minus 3, according to a Reuters poll. New orders climbed to 10.7 from minus 4.6.
Any reading above zero indicates expansion in the region's manufacturing sector. The survey covers factories in eastern Pennsylvania, southern New Jersey and Delaware.
It is seen as one of the first monthly indicators of the health of U.S. manufacturing leading up to the national report by the Institute for Supply Management.