US homes sales surged in November, adding to hints of recovery, but revisions to data for the last four years showed the housing recession was much deeper than previously thought.
The National Association of Realtors said that sales of previously owned homes increased 4% from October to an annual rate of 4.42 million units. At November's sales pace, the 2.58 million unsold homes on the market represented a seven month's supply, the lowest since February 2007 and a sign a backlog of inventory that has been weighing on the market was slowly clearing.
The rise in sales and drop in inventory was the latest sign the housing sector, which triggered the 2007-09 recession, was on the cusp of a recovery. Data yesterday showed housing starts scaled a one and a half year high in November.
The Realtors group also said today that it had overstated home sales from 2007 to 2010 by 14.3%. It said sales bottomed at a 3.30 million-unit pace in July 2010, rather than 3.86 million, underscoring the depth of the housing market downturn.
The industry group said sales over that four-year period averaged 4.42 million units a year compared with the previous estimate was 5.16 million units. It blamed double-counting of properties and geographic population shifts, among other reasons, for the revsions.
A housing recovery could help underpin what already appears to be a broader quickening of US economic growth. During normal times, economists estimate that one out of every eight jobs in the economy is generated by housing-related activity.
While the US economy appears to be gathering strength, the global backdrop remains troubling with much of the rest of the world slowing down and Europe sliding into an almost certain recession.
But while the inventory of unsold home fell in November, market conditions are still troubled. A supply of between six and seven months is generally considered ideal, with higher readings pointing to lower house prices.
The median sales price rose 2.1% from October, but was still down 3.5% from a year ago at $164,200. Given the glut of foreclosed properties hitting the market, analysts believe prices will remain under pressure for months to come.
A separate report showed applications for US home mortgages slipped 2.6% last week, with both refinancing and home purchase demand falling. Mortgage demand had risen sharply earlier this month on a wave of refinancing activity.
