WASHINGTON-Sales of previously owned homes tumbled to a
six-month low in November, a sign the housing market continues to
underperform despite a burst of hiring and stronger economic
growth.
Existing-home sales declined 6.1% in November from a month
earlier to a seasonally adjusted annual rate of 4.93 million, the
National Association of Realtors said Monday. That was the lowest
level since May.
Revised figures showed sales climbed to a 5.25 million pace
October, slightly weaker than the initially reported 5.26 million
but still the highest level of the year.
Economists surveyed by The Wall Street Journal had expected
November sales to reach a rate of 5.20 million.
November's sales were 2.1% higher from a year ago.
NAR Chief Economist Lawrence Yun called last month's decline
puzzling given strong job creation, rising consumer confidence and
near-record stock-market levels. "Factors for improving home sales
are rising," Mr. Yun said. "Today's decline, which is a large
decline, is a bit puzzling and I think it will be a one-month
aberration."
He pointed to several possible reasons for the latest dip,
including tightening inventory levels that have left consumers with
fewer choices, and stock-market volatility in October that may have
rattled prospective buyers.
News Corp, owner of The Wall Street Journal, also owns Move
Inc., which operates a website and mobile products for the National
Association of Realtors.
Previously owned homes represent about 90% of all homes sold.
After falling in late 2013, sales have risen steadily this year
amid a decline in mortgage rates and stronger job growth.
The average rate on a 30-year fixed-rate mortgage fell to 3.80%
last week, according to Freddie Mac, down from 4.53% at the start
of the year. Meantime, the U.S. is on track to post its strongest
year of job growth since 1999.
But sales remain weak historically, with the Federal Reserve
saying in its latest policy statement last week that the housing
sector remains "slow."
Fed Chairwoman Janet Yellen told reporters tight credit is
likely a factor, with borrowers who lack pristine credit histories
having a hard time obtaining loans. She also pointed to
historically weak household formation. But she said she believes
housing will pick up as the labor market improves.
Monday's report showed that in November, existing-home sales
fell in all four major regions--the Northeast, South, West, and
Midwest.
Inventories tightened. The number of homes for sale fell 6.7% in
November from a month earlier to 2.09 million. At the current sales
pace, it would take 5.1 months to exhaust the supply of homes on
the market.
The median sale price for existing homes continued to rise,
hitting $205,300, or 5.0% above the year-ago level.
Other recent reports offer mixed signals on the housing market.
An index of homebuilder confidence dipped this month but remained
at a level suggesting most home builders remain optimistic, the
National Association of Home Builders said last week. Construction
of single-family homes has risen slightly this year but remains
weak historically.
Write to Josh Mitchell at joshua.mitchell@wsj.com and Sarah
Portlock at sarah.portlock@wsj.com.
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