WASHINGTON – New homes in the U.S. sold at a slower pace than projected in November, a sign momentum in housing is cooling as the year draws to a close.
Sales rose 4.3 percent to a 490,000 annualized pace following a 470,000 rate in October, Commerce Department figures showed Wednesday in Washington. The median estimate of economists surveyed by Bloomberg called for a 505,000 pace, and purchases in the prior three months were revised lower.
After a strong start to the year, housing has posted choppy progress lately, held back in part by a limited selection of homes that’s causing prices to appreciate faster than wages. Continued progress in the labor market that results in higher pay will be needed to boost demand further, giving builders renewed incentive to step up construction.
“Home prices have risen pretty sharply over the last three to four years because of the lack of supply,” Stephen Stanley, chief economist at Amherst Pierpont Securities LLC in New York, said before the report. “That seems to me to be the biggest negative for home sales outlook.”
Economists’ estimates ranged from a sales rate of 400,000 to 550,000 after a previously reported 495,000 in October. Purchases in August and September were also revised downward.
The revisions suggest the November data should also be considered as preliminary. The report said there was 90 percent confidence the change in sales last month ranged from a 7.6 percent drop to a 16.2 percent increase.
New-home purchases were 11.1 percent higher in November than during the same period in 2014 on an unadjusted basis, the Commerce Department’s report showed.
The median price of a new home increased 0.8 percent last month from a year ago, to $305,000.
Purchases rose in two of four regions in November, led by a 20.5 percent increase in the West, which was the most since August 2014. Sales climbed 4.5 percent in the South.
The supply of homes at the current sales rate decreased to 5.7 months from 5.8 months in October. There were 232,000 new houses on the market at the end of last month, up from 227,000.