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 The reports on Thursday came a day after the Federal Reserve gave
the economy a vote of confidence by announcing that it would reduce
its monthly $85 billion bond buying program by $10 billion starting
in January.
"Things have not changed. It's still a marginally rosier outlook in
the short-term," said Jacob Oubina, senior U.S. economist at RBC
Capital Markets in New York.
The National Association of Realtors said sales of previously owned
homes fell 4.3 percent last month to an annual rate of 4.90 million
units. That was the lowest since December last year and the third
straight monthly drop.
A rise in interest rates since the spring and fast-rising home
prices have shut some potential buyers out of the market, dampening
home sales in recent months.
Economists polled by Reuters had expected home resales to fall only
to a 5.03 million-unit pace in November.
Housing market fundamentals, however, remain solid. Household
formation is rising steadily from multi-decade lows, which in turn
is keeping demand for housing supported and encouraging builders to
undertake new projects.
Median home prices increased 9.4 percent from a year-ago and the
share of distressed properties — foreclosed and short sales — declined over the same period.
The inventory of previously owned homes on the market slipped 0.9
percent to 2.09 million units, representing a 5.1 months' supply at
November's sales pace. That compared to 4.9 months' worth in
October.
A 6.0 months' supply is normally considered healthy.
"We are starting to reach a point where we are seeing a shift from a
speculative investor driven recovery to one that is going to be more
represented by the traditional buyers and sellers that make housing
decisions based on lifestyle," said Budge Huskey, chief executive
officer at Coldwell Banker Real Estate in Madison, New Jersey.
Stocks on Wall Street were little changed after rallying the prior
session. U.S. Treasury debt prices fell, while the dollar rose
against a basket of currencies.
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SEASONAL VOLATILITY
In a separate report, the Labor Department said initial claims for
state unemployment benefits increased 10,000 last week to 379,000,
the highest level since March.
But other labor market indicators have pointed to a strengthening in
job growth, and economists discounted the data, which covered the
period for the government's December nonfarm payrolls survey.
"The rise was likely due to year-end holiday seasonal layoffs, which
the government struggles to adjust properly at this time of year,"
said Mei Li, an economist at FTN Financial in New York.
"Nevertheless, claims will have to be watched closely in coming
weeks. If the rise does not quickly reverse it will be a sign there
is more going on."
A third report showing factory activity in the U.S. mid-Atlantic
picked up last month offered an upbeat signal on labor market
conditions. The rise in the Philadelphia Federal Reserve Bank's
business activity index was driven by gains in employment measures
and new orders.
(Reporting by Lucia Mutikani; additional
reporting by Jason Lange in Washington and Richard Leong in New
York; editing by Paul Simao and Andrea Ricci)
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