The pace of existing US home sales edged up in November from a record low, according to a report today that offered some tentative signs of stabilisation in the still-ailing housing market.
Sales of previously owned homes rose 0.4% to a 5 million-unit annual rate, the first increase in nine months, the National Association of Realtors said.
Economists and investors breathed a small sigh of relief that the glut of unsold homes was smaller than a month earlier, dipping to 10.3 months' supply at November's sales pace from 10.7 in October, as falling prices spurred stronger demand.
Wall Street economists had expected home resales to hold steady at October's previously reported 4.97 million-unit pace. October sales were revised up to a 4.98 million unit rate, still a record low.
While the inventory of unsold homes moved down, it remained elevated at 4.27 million homes as the ongoing turmoil in the credit markets thinned the pool of potential buyers, suggesting it may be some time before the market regains solid footing.
Economists and investors are eager for signs the housing market is stabilising after a tumultuous year that saw credit markets freeze up in the wake of rising mortgage defaults. Over the past year, sales of existing homes have plummeted by 20%.
The Realtors' group urged the US Federal Reserve to slash interest rates by as much as three-quarters of a percentage point in January as a way to embolden home buyers. Most economists expect a quarter-point cut at the central bank's meeting on January 29-30.
The Fed already has lowered its key interest rate three times since mid-September by a cumulative one percentage point in an effort to insulate the broader economy from the housing woes.
The national median existing home price for November fell 3.3% from a year earlier to $210,200. That was the fifth-largest decline on record. October's was the biggest.
A separate report last week showed that sales of new homes slumped 9% in November to the lowest rate in more than 12 years. Taken together, the reports suggested that it may be some time before the housing market rebounds.
