Sales of existing homes rose more than forecast in November, to their highest level since February 2007, a sign that housing is gaining strength along with the broader economy entering 2010.
Purchases increased 7.4%, to a 6.54 million annual rate, from a revised 6.09 million pace in October, the National Association of Realtors said Tuesday. The median sales price declined 4.3% from the same month a year earlier, the smallest decrease since November 2007.
A homebuyer tax credit “had the intended impact of drawing buyers in and lowering inventory,” Lawrence Yun, the Realtors group’s chief economist, said during a press conference. “An estimated 2 million buyers have taken advantage of the credit.”
The share of homes sold as foreclosures or otherwise distressed properties was 33%, Yun said.
Home prices fell 1.9% in October from a year earlier, the Federal Housing Finance Agency said in a separate report Tuesday. The regulator’s index of prices was 10.8% below its April 2007 peak.
Existing-home sales had been expected to rise to a 6.25 million annual rate, according to the median of 69 economists’ estimates in a Bloomberg News survey. The estimates ranged from 5.2 million to 6.5 million, after an initially reported 6.1 million rate in October.
Home resale data comprises contract closings and may reflect purchases agreed upon weeks or months earlier. Many economists consider new-home sales, which are recorded when a contract is signed, a more timely market barometer. The Commerce Department is scheduled to report new home sales data for Novermber today.
Existing-home sales fell to a 4.49 million pace in January, their lowest rate since comparable records began being kept in 1999.
Purchases of existing homes rose 44% in November compared to a year earlier, the biggest increase on record. The median price fell to $172,600.
The number of previously owned unsold homes on the market fell 1.3%, to 3.52 million.
At the current sales pace, it would take 6.5 months to sell those houses, compared with seven months in October. The number is the lowest since December 2006.
The report showed sales of existing single-family homes rose 8.5%, to a 5.77 million annual rate. Condo and co-op sales were unchanged, at a 770,000 rate.
Purchases grew by 10.6% in the West, 8.4% in the Midwest, 6.6% in the Northeast, and 4.8% in the South.