By Josh Boak
AP Economics Writer
WASHINGTON (AP) — Americans appear less inclined to buy new homes as the year ends. Sales improved in November only because fewer people bought new homes in October than initially reported.
The Commerce Department said last Wednesday that new-home sales rose 4.3 percent last month to a seasonally adjusted annual rate of 490,000. But that increase was made possible mainly because the sales rate for October was revised sharply down to 470,000 from 495,000.
The housing market has strengthened for much of this year. Yet it has noticeably cooled since September as purchases of new homes in the Northeast and Midwest have been uneven. Year to date, new-home sales have advanced 14.5 percent, driven by job growth that pulled the unemployment rate to a healthy 5 percent and relatively low mortgage rates.
“November new home sales disappointed, but this recent volatility has become a constant,” said Ray Rodriguez, a mortgage sales manager at TD Bank. “We remain optimistic about new home sales leveling out, especially with the projected increase in residential units next year alleviating supply concerns and stimulating home purchases.”
The residential construction sector is still recovering from the housing bust and the Great Recession, which officially ended more than six years ago. New-home sales remain below their 52-year historic average of 655,200. Yet prices are rising. The median new-home sales price has advanced 0.8 from a year ago to $305,000.
Real estate has also encountered new regulatory challenges as 2015 winds down. The introduction of new mortgage disclosure rules appears to have delayed sales of existing homes in November. Introduced by the Consumer Financial Protection Bureau, the guidelines provide a framework for informing homebuyers about interest rates and fees that may take months for the housing industry to adapt to.
The National Association of Realtors said last Monday that sales of existing homes plummeted 10.5 percent in November to a seasonally adjusted annual rate of 4.76 million, the weakest pace in 19 months.
Despite that decline, sales of existing homes are poised to rise 5 percent in 2015 from a year ago.
Low mortgage rates have aided buying this year. Still, rates are now slightly higher than a year ago. The Federal Reserve hiked a key short-term rate last week, the first increase of its kind in nearly a decade as the economy appears solid enough to manage higher borrowing costs.
