U.S. Existing Home Sales Rose in November, Down From Year Ago
December 19 2018 - 10:30AM
Dow Jones News
By Sarah Chaney and Eric Morath
WASHINGTON-November sales of previously owned U.S. homes edged
up from a month earlier but clocked the largest annual decline in
more than seven years, signaling the sputtering housing market may
finish the year on a weak note.
Existing-home sales rose 1.9% in November from the previous
month to a seasonally adjusted annual rate of 5.32 million, the
National Association of Realtors said Wednesday. Economists
surveyed by The Wall Street Journal had expected sales to notch a
5.17 million annual rate last month.
Despite the monthly rise, sales in November decreased 7.0% from
a year earlier, the largest year-over-year drop since May 2011.
Sales have declined annually in all but one month in 2018 so
far.
This year's sales slowdown has stemmed from growing challenges
for the housing market. A shortage of homes for sale at a time when
continued job and wage growth are supporting demand have
contributed to a rapid run-up in home prices.
Meanwhile, mortgage rates have risen in the last year and appear
to be nearing 5%, a threshold analysts say could deter many from
purchasing a home. The average interest rate on a 30-year
fixed-rate mortgage in November was 4.87%, up from 4.03% in
January, according to Freddie Mac.
The median sale price for an existing home in November was
$257,700, up 4.2% from a year earlier. There was a 3.9-months'
supply of homes on the market at the end of November, based on the
current sales pace. While that's up from a 3.5-months' pace a year
earlier, inventory is coming back on the market for higher-priced
homes.
"There is still a housing shortage for affordable homes that
many moderate to middle-income families will be looking for," said
Lawrence Yun, the trade group's chief economist.
The Trump administration's tax bill also reduced some incentives
for homeownership, especially in costly coastal markets and
high-tax areas, by reducing the cap for the deductibility of
mortgage interest and limiting the amount of state and local taxes
that can be deducted.
Purchases of previously owned homes account for the bulk of U.S.
home-buying activity. The Commerce Department releases data on
November new-home sales next Thursday.
In November, single-family construction, which has stagnated
this year after steadily climbing throughout the expansion, dropped
for the third consecutive month, according to the Commerce
Department.
Analysts say builders could be taking a cautious stance because
of the overall temperature of the housing market. Home-builder
sentiment in December fell to its lowest level since May 2015,
according to the National Association of Home Builders.
News Corp., owner of The Wall Street Journal, also operates
Realtor.com under license from the National Association of
Realtors.
Write to Sarah Chaney at sarah.chaney@wsj.com and Eric Morath at
eric.morath@wsj.com
(END) Dow Jones Newswires
December 19, 2018 10:15 ET (15:15 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.