New home sales rose moderately in November, a sign the rocky housing recovery may be stabilizing.
Sales ran at an annual rate of 490,000, the highest since August, the Commerce Department said Wednesday.
November’s tally was up 4.3% from a downwardly revised 470,000 rate in October, and was 9.1% higher compared with a year ago.
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Economists surveyed by MarketWatch had forecast a rate of 505,000, so the November rate fell a bit short of expectations. However, new-home sales data are notoriously volatile and often heavily revised. Taking that into account, the data continue to show improvement, Jim O’Sullivan, chief U.S. economist for High Frequency Economics, wrote in a client note. The year-to-date average annual rate of 495,500 new home sales is about 14% higher than the same period a year ago.
The pickup reflects growth in the broader economy. The jobless rate is at a seven-year low, and that’s finally nudging wages higher. They rose nearly 5% compared with a year ago in November, the Commerce Department said in an earlier report Wednesday.
It may also signal some firming in home builder activity. Sentiment has been running high among builders like Lennar Corp. LEN, -0.18% and PulteGroup Inc. PHM, +1.41% though some headwinds, like higher costs for labor and land, remain.
As demand from buyers remains stronger than supply, prices are rising. The median price rose 6.3% in November to $305,000. At the current sales pace, it would take 5.7 months to exhaust the available supply. That’s a bit below the long-term average of six months.