U.S. home resales fell sharply in November to their lowest level in nearly a year, hurt by a rise in interest rates since the spring and ongoing price increases that have shut some home buyers out of the market.
The National Association of Realtors (NAR) said on Thursday that sales of previously owned homes dropped 4.3 percent last month, the third monthly fall in a row, to an annual rate of 4.90 million units.
That was the lowest annual rate since December 2012, and well below the median forecast in a Reuters poll of a 5.03 million unit pace.
“It is a clear loss in momentum for home sales,” NAR economist Lawrence Yun told reporters.
Mortgage interest rates have risen sharply since May on expectations the Federal Reserve would start winding down a bond-buying economic stimulus program. The Fed announced on Wednesday it would start tapering its monthly bond purchases next month.
Yun said the rise in mortgage rates, coupled with fast-rising prices, had made home buying less affordable for many Americans.
The data carried a hint, however, that home price gains may be cooling off. The median price nationwide rose 9.4 percent inNovember from the same month in 2012 to $196,300. It was the first time in a year that prices didn’t rise at a double-digit pace.
Yun said the NAR was “very concerned” about plans by the Federal Housing Finance Agency to reduce the maximum size of mortgages which can be bought by taxpayer-owned finance giants Fannie Mae and Freddie Mac. He said this could further impede the housing market’s recovery.