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Existing home sales rose more than expected in November, according to the National Association of Realtors.
Sales increased by 0.7% at a seasonally adjusted annual rate of 5.61 million. Economists had forecast that sales fell by 1.8% at a rate of 5.50 million, according to Bloomberg.
Most homes that are bought and sold in the US are not brand new, making this the most active segment of the market.
Sales spiked in the Northeast, where slower price growth made it easier for buyers to close deals, according to the NAR. Also, some buyers hurried to the market to lock in the lowest mortgage rates they could. Rates have increased since the election.
However, housing supply was worse in November than it was at the beginning of the year; inventory was down 9.3% year-on-year at the end of the month.
“As a result, both home prices and rents continue to far outstrip incomes in much of the country,” said Lawrence Yun, the NAR’s chief economist.
“The post-election increase in mortgage rates, while not yet impacting sales activity, is expected to slow the pace of existing-home sales and house price appreciation in 2017,” said Mark Fleming, chief economist at First American, in a preview.
“Home price appreciation is typically more sensitive to mortgage rate increases and I expect to see a decline in the house price growth rate of almost a full percentage point by the end of 2017.”