WASHINGTON – The National Association of Realtors reports on sales of existing homes in November. The report is scheduled to be released Monday at 10 a.m. Eastern.
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SLIGHT DECLINE: Economists forecast that sales slipped 1.1 percent to a seasonally adjusted annual rate of 5.2 million last month, according to a survey by data firm FactSet. Purchases rose 1.5 percent to 5.26 million in October, the highest level since September 2013. That suggested sales were rebounding after struggling for most of this year.
Sales in October were 2.5 percent higher than 12 months earlier, the first time in 2014 that purchases topped their year-earlier level.
SLUGGISH YEAR: Home sales slumped through much of 2014 after a three-year rally in the wake of the recession and the implosion of the housing market. Harsh winter weather crippled sales at the beginning of 2014, just as tight credit, rising home prices and essentially flat incomes increasingly limited the number of buyers who could afford a home.
The Realtors estimate that 4.94 million existing homes will be sold this year, down 3 percent from 5.09 million in 2013. Analysts say sales of roughly 5.5 million existing homes are common in a healthy real estate market.
BETTER SALES AHEAD?: There are signs that home sales may improve in 2015. Mortgage rates have fallen sharply in the past few weeks, which should make homes more affordable for many would-be buyers. The average rate for a 30-year fixed mortgage dropped this week to 3.8 percent, from 3.93 percent last week. That is the lowest level since May 2013.
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Rates have fallen as investors, spooked by plummeting oil prices and signs of slowing growth overseas, have plowed money into 10-year U.S. Treasury notes, pushing down their yields. Mortgage rates usually follow the yield on the 10-year note.
Sales may also pick up as the housing market continues to heal from its boom and bust last decade. Real estate data provider Zillow said last week that the proportion of U.S. homeowners with mortgages who are "under water" — meaning they owe more than the house is worth — has fallen by almost half in the past two years.
Rising prices and foreclosures have brought that figure down. As more homeowners gain equity in their homes, they are more likely to list their homes for sale, keeping home prices in check and spurring more sales.
Stan Humphries, Zillow's chief economist, forecasts that sales of existing homes will rise to 5.2 million next year from just under 5 million in 2014.