Fewer Americans bought homes in November as buying slid to its slowest pace in six months.
The National Association of Realtors said Monday that sales of existing homes fell 6.1 percent to a seasonally adjusted annual rate of 4.93 million. That was down from a revised annual pace of 5.26 million in October. Over the past 12 months, sales have risen 2.1 percent.
The combination of higher home prices and relatively stagnant incomes has reduced affordability and restrained buying activity. A recent decline in mortgage rates has yet to lure more buyers into the market. At the same time, fewer distressed properties and bargains, which tend to attract investors, are coming onto the market.
Median home prices rose 5 percent over the past 12 months to $205,300.
The Realtors estimate that 2014 sales will end up below 2013 levels. Sales have slumped through much of this year after a three-year rally that followed the recession and the implosion of the housing market. Harsh winter weather crippled sales at the start of 2014, just as tight credit, rising home prices and essentially flat incomes limited the number of buyers who could afford a home.
The Realtors estimate that 4.94 million existing homes will be sold this year, down 3 percent from 5.09 million in 2013. Analysts say sales of roughly 5.5 million existing homes are common in a healthy real estate market.
There are signs that sales may improve in 2015. Mortgage rates have fallen sharply in the past few weeks, which should make homes more affordable. The average rate for a 30-year fixed mortgage dropped last week to 3.8 percent, from 3.93 percent the previous week. That was the lowest level since May 2013.
Rates have fallen as investors, spooked by plummeting oil prices and signs of slowing growth overseas, have plowed money into 10-year U.S. Treasury notes, pushing down their yields. Mortgage rates usually track the yield on the 10-year note.
Sales may also pick up as the housing market continues to heal from its boom-and-bust last decade. Real estate data provider Zillow said last week that the proportion of U.S. homeowners with mortgages who are "under water" — meaning they owe more than their house is worth — has fallen by almost half in the past two years.
Rising prices and foreclosures have reduced that figure. As more homeowners gain equity in their homes, they are more likely to list their homes for sale, keeping home prices in check and spurring more sales.
Stan Humphries, Zillow's chief economist, forecasts that sales of existing homes will rise to 5.2 million next year from just under 5 million in 2014.
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