Sales of previously owned homes nudged up in November, but that didn't improve the broader picture of a feeble U.S. housing market racked by...
WASHINGTON — Sales of previously owned homes nudged up in November, but that didn’t improve the broader picture of a feeble U.S. housing market racked by record-high foreclosures and harder-to-get credit.
The National Association of Realtors reported Monday that sales of existing single-family homes, condominiums and townhouses rose 0.4 percent in November from October, to a seasonally adjusted annual rate of 5 million units.
Even with the small increase, the pace of sales was the second-lowest on record going back to 1999. The lowest pace — 4.98 million — was in October.
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“There’s little reason to pop open any champagne corks,” said Michael Larson, a real-estate analyst at Florida-based Weiss Research.
Sales are down 20 percent from November 2006, underscoring the problems plaguing the housing sector.
Economists had expected sales to either move up slightly or hold steady for November.
Home prices continued to sink, with the median last month at $210,200, a 3.3 percent drop from a year earlier. It was the fifth-biggest annual decline on record. The median price is where half of homes sell for more, half for less.
In King County, November marked the ninth consecutive month of declining home sales, with 2,084 houses and condominiums changing hands. Compared with a year earlier, that represented a 24 percent decline in pending sales.
Prices rolled back, too, compared with earlier in 2007, the Northwest Multiple Listing Service reported. The median price of a detached house was $435,000, the same figure as November 2006. That’s down $42,000 compared with August 2007.
Meanwhile, the number of homes for sale in November, including condominiums, was up 47 percent compared with a year earlier.
Surrounding counties exhibited the same trends.
U.S. existing-home sales were mixed by region of the country. Sales jumped 10.3 percent in November from October in the West. They were flat in the Midwest but fell 2 percent in the South and 3.3 percent in the Northeast.
“There is no doubt that housing is weak and will be weak in 2008,” said economist Ken Mayland, president of Ohio-based ClearView Economics.
The inventory of unsold homes in November was 4.27 million homes. At the current sales pace, it would take 10.3 months to exhaust that overhang.
“Inventory is still high and further reduction in prices may be required in some areas to induce buyers back into the market,” said Lawrence Yun, the Realtors association’s chief economist.
A dip in 30-year mortgage rates in November probably helped give existing-home sales the small boost, the association suggested. Yun thought the small increase could be a sign the market might be stabilizing.
That said, signs of stabilization earlier in the year have been dashed.
A credit crunch that took a turn for the worse in the summer has aggravated housing problems, making it more difficult for people to secure financing.
The housing market is suffering through a severe slump after five years of record-breaking activity from 2001 through 2005. Sales turned weak, as did home prices.
The boom-to-bust situation has increased dangers to the economy as a whole and has been especially hard on some homeowners.
Foreclosures have soared to record highs. A drop in home prices left some people stuck with balances on their mortgages that eclipsed the worth of their home.
Other homebuyers were clobbered as low introductory rates on their mortgages jumped to much higher rates, which they couldn’t afford.
“A significant number of mortgages reset in early 2008 will likely increase delinquencies and foreclosures, driving prices lower and pushing buyers away,” predicted Benjamin Reitzes, economic analyst at BMO Capital Markets Economics. “This could get even worse before it gets better.”
The housing and mortgage meltdowns have raised the odds for a recession and given both Democrats and Republicans — including those running for president — plenty of opportunities to spread blame.
The economy’s growth is expected to have slowed sharply to a pace of no more than 1.5 percent in the final three months of the year.
The big worry is housing and credit troubles will force individuals to cut back on spending and businesses to cut back on hiring and capital investment, throwing the economy into a tailspin.
To help bolster the economy, the Federal Reserve has sliced a key interest rate three times this year.
Many economists predict another cut at the Fed’s meeting in late January.
Yun said he preferred to see the Fed make one big rate reduction at that time, rather than a series of modest, quarter-point cuts.
Friday, the government reported new-home sales plunged 9 percent in November to a pace of 647,000, the lowest in more than 12 years.
The new-home numbers are thought to give a more current account of the health of the housing market because they are recorded when a contract is signed.
The existing-home figures lag behind because they are based on contract closings, many of which reflect deals negotiated months earlier.
Times business reporter Elizabeth Rhodes contributed local information for this story.