WASHINGTON — The number of Americans who signed contracts to buy existing homes in November was nearly unchanged from October, suggesting sales are stabilizing after several months of declines.
The National Association of Realtors said on Monday that its seasonally adjusted index for pending home sales ticked up to 101.7 from 101.5 in October. The October figure was revised lower from an initial reading of 102.1.
Higher mortgage rates and strong price gains over the last two years have slowed sales. The pending home sales index had fallen for five straight months before November. Completed sales of existing homes fell for three straight months, the association said earlier this month.
There is generally a one- to two-month lag from a signed contract to a completed sale.
The average interest rate on a 30-year mortgage edged higher to 4.48 percent last week, from 4.47 percent the previous week. Mortgage rates jumped about 1.25 percentage points from May through September, peaking at 4.6 percent, after the Federal Reserve’s chairman, Ben S. Bernanke, indicated in the spring that the Fed would start to scale back its economic stimulus program before the end of the year.
Earlier this month, the Fed announced it would reduce its $85 billion in monthly purchases of Treasury and mortgage-backed securities by $10 billion a month starting in January. The bond purchases are intended to hold down longer-term interest rates and encourage more borrowing and spending.
Robert Kavcic, an economist at BMO Capital Markets, said that recent housing market indicators had been mixed. Applications for mortgages to purchase homes fell to a nearly two-year low last week, he said.
Still, Mr. Kavcic said, “We continue to believe that the U.S. housing market will absorb the upward move in mortgage rates and push higher in 2014, helped by still-attractive affordability, better job growth and improved confidence in the recovery.”
Despite the recent declines, sales of existing homes should reach 5.1 million in 2013, the highest total in seven years, the association forecast. That is 10 percent higher than 2012’s total of almost 4.7 million. But it is still below the 5.5 million that is consistent with a healthy housing market.
The association forecast that sales would remain largely flat in 2014 and then rise to 5.3 million in 2015. Steady job gains should make it easier for more people to buy homes. And mortgage rates remain low by historical standards.
Signed contracts for existing homes rose in the South and West last month, while falling in the Northeast and Midwest.
Article source: http://www.nytimes.com/2013/12/31/business/home-sales-barely-budge-indicating-stability-in-sales.html?partner=rss&emc=rss
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