BUSINESS

US home sales jump to a 5 million annual pace in November, highest in 3 years

12/20/2012 10:41 EST | Updated 02/19/2013 05:12 EST
WASHINGTON - Sales of previously occupied homes in the United States jumped to their highest level in three years last month, bolstered by steady job gains and record-low mortgage rates.

The National Association of Realtors said Thursday that sales rose 5.9 per cent to a seasonally adjusted annual rate of 5.04 million in November. That's up from 4.76 million in October.

The pickup in activity in the U.S. market contrasts with a recent slowdown in Canadian sales of previously owned homes. The Canadian market recovered quickly from the 2008-9 recession and had shown strong demand and rising prices until this summer, when the sales volumes began to decline.

In the United States, previously occupied home sales are on track for their best year in five years. November's sales were the highest since November 2009, when a federal tax credit that was soon to expire spurred sales. Excluding that month, last month's sales were the highest since July 2007.

American sales are up 14.5 per cent from a year ago, though they remain below the roughly 5.5 million that are consistent with a healthy market.

Job growth and low home-loan rates have helped drive purchases. Prices are also rising, which encourages more potential buyers to come off the sidelines and purchase homes. And more people may put their homes on the market if they feel confident they can sell at a good price.

In addition, the excess supply of homes that built up during the housing bubble has finally thinned out. The number of previously occupied homes available for sale fell to a 10-year low in October. The supply of new homes is also near its lowest level since 1963.

At the same time, more people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.

These trends have supported a steady recovery in housing. Builder confidence rose in December for a seventh straight month to the highest level in more than 6 1/2 years, according to a survey released Tuesday by the National Association of Home Builders/Wells Fargo.

The pace of home construction slipped in November, but it was still nearly 22 per cent higher than a year earlier. Builders are on track this year to start work on the most homes in four years.

Economists note that the increase in building should lead to more construction jobs, though it hasn't yet done so. That could mean more construction hiring is coming.

— With files from The Canadian Press.