New US single-family home sales rose for the second month in a row in November, likely as Americans benefited from a retreat in mortgage rates and incentives from desperate builders, but the general housing market stays depressed.
New home sales rose 5.8% last month to a seasonally adjusted annualized rate of 640,000 units, the Commerce Department said on Friday. The October sales pace was revised right down to 605,000 units from a previously reported 632,000.
Sales rose in the Midwest and West, but fell in the Northeast and the densely populated South.
Economists polled by Reuters had forecast recent home sales, which account for a tiny fraction of US home sales, to fall to 600,000 units in November. Sales fell 15.3% year-on-year.
The National Homebuilders Association reported this week that 62% of builders in December used incentives to draw buyers, including lowering mortgage rates, paying buyers with points and offering price reductions.
The fastest cycle of Federal Reserve rate hikes because the Nineteen Eighties, designed to quell inflation, has chilled demand for housing.
This week’s reports showed that sentiment amongst single-family housing remained subdued for a record 12 straight months in December.
Single-family home construction starts and constructing permits fell to a 2.5-year low in November, while pre-owned home sales fell for a tenth straight month, the longest such period since 1999.
The typical rate of interest on a 30-year fixed-rate mortgage fell to six.27% this week after surpassing 7% just a few months ago, the best since 2002. Nonetheless, the rate of interest is greater than double what it was a yr ago. , showed data from the mortgage financing agency Freddie Mac.
The median price of a recent home in November was $471,200, a rise of 9.5% over the previous yr. There have been 461,000 recent homes available on the market at the top of last month, up from 469,000 in October. Houses under construction accounted for 62.9% of the stock, and houses yet to be built accounted for 23.2%.
Accomplished homes accounted for 13.9% of stock, well below the long-term average of 27%. At November’s sales rate, it could take 8.6 months to clear the provision of homes available on the market, up from 9.3 months in October.