Home Sales Surge in November

The residential real estate sector continued to demonstrate its resilience in the face of recession, with homebuyers snapping up new houses at the fastest pace since March and sales of existing homes rising 0.6 percent.

The Commerce Department said new homes sales rose 6.4 percent in November to a seasonally adjusted 934,000 annual rate. The clip was the fastest since March's 953,000 annual rate and the gain was the largest monthly percentage jump since December 2000.

Meanwhile, the National Association of Realtors said that previously owned homes, the largest category of home sales, sold at a seasonally adjusted annualized pace of 5.21 million units last month, up from a revised rate of 5.18 million in October.

The figures were stronger than Wall Street analysts had been expecting and showed the impact of relatively low mortgage interest rates combined with unseasonably warm weather for the month. In a survey of economists by Reuters, the average forecast called for new home sales to post a much smaller rise to about an 888,000 annual rate.

"It's obvious the country has overestimated the negative impact of the Sept. 11 events on the housing sector," said David Lereah, NAR's chief economist.

Home sales for the year are on pace to surpass the 1999 record of 5.205 million, he said. "Confidence is up all across the industry," Lereah said.

Sales were higher than expected. Analysts polled by Reuters forecast a 5.17 million unit pace in November.

The national median home price rose to $147,300, up 5.6 percent over a year earlier, when it was $139,500.

At the same time, the inventory of homes available for sale also rose. There was a 4.8 months' supply of homes available for sale in November, up from a 4.5 months' supply in October.

Reuters contributed to this report.