By Josh Mitchell and Sarah Portlock
WASHINGTON-Sales of previously owned homes tumbled to a six-month low in November, a sign the housing market continues to underperform despite a burst of hiring and stronger economic growth.
Existing-home sales declined 6.1% in November from a month earlier to a seasonally adjusted annual rate of 4.93 million, the National Association of Realtors said Monday. That was the lowest level since May.
Revised figures showed sales climbed to a 5.25 million pace October, slightly weaker than the initially reported 5.26 million but still the highest level of the year.
Economists surveyed by The Wall Street Journal had expected November sales to reach a rate of 5.20 million.
November's sales were 2.1% higher from a year ago.
NAR Chief Economist Lawrence Yun called last month's decline puzzling given strong job creation, rising consumer confidence and near-record stock-market levels. "Factors for improving home sales are rising," Mr. Yun said. "Today's decline, which is a large decline, is a bit puzzling and I think it will be a one-month aberration."
He pointed to several possible reasons for the latest dip, including tightening inventory levels that have left consumers with fewer choices, and stock-market volatility in October that may have rattled prospective buyers.
News Corp, owner of The Wall Street Journal, also owns Move Inc., which operates a website and mobile products for the National Association of Realtors.
Previously owned homes represent about 90% of all homes sold. After falling in late 2013, sales have risen steadily this year amid a decline in mortgage rates and stronger job growth.
The average rate on a 30-year fixed-rate mortgage fell to 3.80% last week, according to Freddie Mac, down from 4.53% at the start of the year. Meantime, the U.S. is on track to post its strongest year of job growth since 1999.
But sales remain weak historically, with the Federal Reserve saying in its latest policy statement last week that the housing sector remains "slow."
Fed Chairwoman Janet Yellen told reporters tight credit is likely a factor, with borrowers who lack pristine credit histories having a hard time obtaining loans. She also pointed to historically weak household formation. But she said she believes housing will pick up as the labor market improves.
Monday's report showed that in November, existing-home sales fell in all four major regions--the Northeast, South, West, and Midwest.
Inventories tightened. The number of homes for sale fell 6.7% in November from a month earlier to 2.09 million. At the current sales pace, it would take 5.1 months to exhaust the supply of homes on the market.
The median sale price for existing homes continued to rise, hitting $205,300, or 5.0% above the year-ago level.
Other recent reports offer mixed signals on the housing market. An index of homebuilder confidence dipped this month but remained at a level suggesting most home builders remain optimistic, the National Association of Home Builders said last week. Construction of single-family homes has risen slightly this year but remains weak historically.
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(END) Dow Jones Newswires
December 22, 2014 10:15 ET (15:15 GMT)
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