Sales of existing homes rose less than forecast in November as the industry that triggered the worst U.S. recession in seven decades struggled to recover after a government tax credit lapsed.
Purchases increased 5.6% from the prior month, to a 4.68 million annual rate, the National Association of Realtors said Wednesday.
Economists had projected sales would rise to a 4.75 million pace, according to the median forecast in a Bloomberg News survey. The median price rose 0.4% from a year earlier.
Previous decreases in prices and mortgage rates have made houses more affordable, which may keep supporting demand after the end of a government tax credit caused the industry to slump.
At the same time, unemployment hovering near 10% is a reminder that it will take years for housing to regain pre-recession levels.
"Housing is going to remain dead in the water through the middle of" 2011, said Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, N.C., who forecast sales would climb to a 4.65 million pace.
"As foreclosures come back on the market, that will put downward pressure on prices," Vitner said.
Estimates of the 70 economists surveyed by Bloomberg ranged from 4.25 million to 5.2 million.
Compared with November 2009, which was the peak of the tax credit's influence, sales of existing homes were down 25% before adjusting for seasonal patterns.
Sales last month rose in all of four regions, Wednesday's report showed, led by a 12% gain in the West.
The median price increased to $170,600 last month from $170,000 in November 2009.
Purchases of single-family homes climbed 6.7%, to a 4.15 million annual rate in November from a month earlier, the group said. Sales of condominiums and townhouses dropped 1.9%.
The number of previously owned homes on the market fell 4%, to 3.71 million. At the current sales pace, it would take 9.5 months to sell those houses, compared with 10.5 months in October.
A month's supply in the eight month to nine month range is consistent with stable home prices, the group said.
Distressed sales, which include foreclosures and short sales (in which the bank allows a home to sell for less than the full amount of the mortgage), accounted for 33% of total sales, about the same as in prior months.
A tax credit worth as much as $8,000 boosted sales to a two-year-high pace of 6.49 million in November 2009, when the incentive was originally due to expire.
The subsequent extension of the credit prompted a rebound in sales for two months through April, followed by a plunge in July to a 3.84 million rate, the weakest in a decade's worth of record keeping.
The group projects sales for the year will drop to a 4.8 million pace, the fewest for a full year since 1997.
Purchases will climb to 5.2 million in 2011, a "sustainable" pace, the Realtors' chief economist, Lawrence Yun, said at a press conference.