WASHINGTON — Sales of previously owned homes rose more than forecast in November to reach a three-year high as lower borrowing costs sustained the U.S. housing rebound.
Purchases of existing houses increased 5.9 percent to a 5.04 million annual rate, the most since November 2009, the National Association of Realtors reported Thursday in Washington. The median forecast of 82 economists surveyed by Bloomberg projected an increase to a 4.9 million rate. Property values climbed 10.1 percent over the past 12 months as inventories dropped to the lowest level in 11 years.
Record-low mortgage rates and an improved job market are boosting sales and cutting inventories, giving the market the opportunity to absorb foreclosures. Prices are rising as a result, which will probably draw more buyers seeking to take advantage of current affordability in housing, helping retailers such as Pier 1 Imports and Lowe’s.
“Housing is probably the best news out there," said Nariman Behravesh, chief economist at IHS Inc. in Lexington, Mass. “The recovery is being carried on the shoulders of the consumer and the housing sector, and that’s good news."
Thursday’s report on existing home sales showed the median price increased to $180,600 from $164,000 in November 2011. The increase reflects a growing share of sales of higher-priced properties, Lawrence Yun, NAR chief economist, said in a news conference as the figures were released.
Compared with a year earlier, purchases increased 15.5 percent before adjusting for seasonal variations.
The number of previously owned homes on the market dropped to 2.03 million, the fewest since December 2001. At the current sales pace, it would take 4.8 months to sell those houses, the lowest since September 2005, compared with 5.3 months at the end of October.
Sales of single-family houses increased 5.5 percent to an annual rate of 4.44 million. Purchases of multifamily properties, including condominiums, climbed 9.1 percent to a 600,000 pace.
Purchases increased in all four regions, led by a 7.9 percent gain in the South. Demand climbed 6.9 percent in the Northeast even as purchases in the areas affected by superstorm Sandy dropped about 10 percent, said Yun. Early reports indicate sales in that region are recovering this month, he said.
Existing-home sales have improved after reaching a low 3.39 million annual rate in July 2010. In the buildup to the subprime lending collapse and recession, purchases reached a peak of 7.25 million in September 2005.
Efforts by Federal Reserve policymakers to boost growth by keeping interest rates low are paying off. The average rate on a 30-year, fixed loan was 3.32 percent last week, compared to 3.94 percent a year ago, according to Freddie Mac.