The pace of existing US home sales edged up in November to a 5 million-unit annual rate and the median price fell from a year earlier, the National Association of Realtors said on Monday. Economists polled by Reuters were expecting home resales to hold steady at October's previously reported 4.97 million-unit pace, which was a record low.
The October sales pace was revised up to a 4.98 million unit rate. While the sales pace was slightly stronger than expected, analysts said the data did not signal that the US housing market's deep slump had reached a bottom. Prices for US government bonds pared gains while stocks trimmed losses after the report. Economists and investors are eager for signs that the housing market is stabilising after a tumultuous year that saw credit markets freeze up in the wake of rising mortgage defaults.
The trade group urged the US Federal Reserve to slash interest rates by as much as three-quarters of a percentage point in January as a way to embolden home buyers. Most economists expect a quarter-point cut at the central bank's meeting on January 29-30.
"The Federal Reserve could greatly help the housing market by making a one-time, large interest rate cut" instead of a series of smaller reductions, said Lawrence Yun, the Realtors' chief economist. "Knowing the Fed may cut rates, people are waiting and waiting to enter the market." The Fed already has lowered its key interest rate three times since mid-September by a cumulative one percentage point in an effort to insulate the broader economy from the housing woes.