Existing Home Sales Inch Up in November
The pace of existing U.S. home sales edged up in November to a 5 million-unit annual rate and the median price fell from a year earlier, the National Association of Realtors said Monday.
Economists polled by Reuters were expecting home resales to hold steady at October's previously reported 4.97 million-unit pace, which was a record low. The October sales pace was revised up to a 4.98 million unit rate.
While the sales pace was slightly stronger than expected, analysts said the data did not signal that the U.S. housing market's deep slump had reached a bottom.
Prices for U.S. government bonds pared gains while stocks trimmed losses after the report. Economists and investors are eager for signs that the housing market is stabilizing after a tumultuous year that saw credit markets freeze up in the wake of rising mortgage defaults.
The trade group urged the Federal Reserve to slash interest rates by as much as three-quarters of a percentage point in January as a way to embolden home buyers. Most economists expect a quarter-point cut at the central bank's meeting on Jan. 29-30.
"The Federal Reserve could greatly help the housing market by making a one-time, large interest rate cut" instead of a series of smaller reductions, said Lawrence Yun, the Realtors' chief economist. "Knowing the Fed may cut rates, people are waiting and waiting to enter the market."
The Fed already has lowered its key interest rate three times since mid-September by a cumulative one percentage point in an effort to insulate the broader economy from the housing woes.
The national median existing home price for November fell 3.3 percent from a year earlier to $210,200. That was the fifth-largest decline on record. October's 5.5 percent drop was the biggest.
The inventory of homes for sale fell 3.6 percent to 4.27 million units at the end of November, which represents about 10.3 months' supply at the current sales pace.
Monday's data comes after Friday's Commerce Department report that showed sales of new homes slumped 9 percent in November to the lowest rate in more than 12 years.
"You want to take the two reports together, which demonstrated ongoing weakness in housing demand. This data today still doesn't indicate we're at a bottom," said Michael Darda, chief economist at MKM Partners in Greenwich, Connecticut.