Existing Home Sales Sink In November

Existing home sales had been showing some life but not in November, sinking a very steep 6.1 percent to a 4.93 million annual rate which is below the low end of the Econoday consensus (4.97 million to 5.35 million). November, a month when the nation's weather proved mild and which should have given a boost to sales, ends 5 straight months of plus 5.0 million rates.

November's weakness is broad based with all 4 regions showing single digit monthly declines. But the good news is that the weakness in sales is not inflating supply which, due to a draw down of homes on the market to 2.09 million from 2.24 million, held steady relative to sales, at 5.1 months.

Lower prices don't seem to be giving a boost to sales. The median fell for a 5th straight month, down 1.1 percent in November to $205,300. Year-on-year the median price, where growth had been in the double digits through most of last year, is up 5.5 percent, holding in the mid-single digit area where it's been since March.

Lower mortgage rates, now below 4.0 percent for some 30-year fixed loans, are another factor not driving up sales. And in what should be another big plus, the strength in the jobs market, is also failing to give the housing sector a lift. New home sales, which have been even flatter than existing home sales, will be posted tomorrow.

Recent History Of This Indicator:
Existing home sales continued to slowly rise in October, gaining 1.5 percent, following a 2.6 percent boost in September. The October pace of 5.26 million units topped expectations for 5.15 million units. On a year-ago basis sales posted at 2.5 percent. Supply declined 2.6 percent in October after a 2.1 percent drop in September. Months' supply slipped to 5.1 months from 5.3 months in September.