WASHINGTON, (Reuters) - Sales of new U.S. single-family homes increased in November, suggesting low mortgage rates continued to support the housing market, though sales activity in the prior month was weaker than previously reported.
The Commerce Department said on Monday new home sales rebounded 1.3% to a seasonally adjusted annual rate of 719,000 units last month, lifted by gains in activity in the Northeast and West regions. October's sales pace was revised down to 710,000 units from the previously reported 733,000 units.
Economists polled by Reuters had forecast new home sales, which account for about 11.8% of housing market sales, rising to a pace of 734,000 units in November.
New home sales are drawn from permits and tend to be volatile on a month-to-month basis.
Sales surged 16.9% from a year ago.
The housing market is regaining momentum after the Federal Reserve cut interest rates three times this year, pushing down mortgage rates from last year's multi-year highs. Single-family building permits scaled their highest level since July 2007 in November. Confidence among homebuilders in December reached levels last seen since June 1999.
But land and labor shortage are constraining builders' ability to ramp up the construction of more affordable homes, limiting gains for the sector, which accounts for about 3.1% of the economy.
The median new house price increased 7.2% to $330,800 in November from a year ago. Sales last month were concentrated in the $200,000-$400,000 price range. Homes priced below $200,000, the most sought after, accounted for only 10% of sales.
New home sales in the South, which accounts for the bulk of transactions, dropped 4.1% in November. Sales in the Northeast jumped 52.4%. Sales were unchanged in the Midwest, but rose 7.5% in the West.
There were 323,000 new homes on the market last month, unchanged from October. At November's sales pace it would take 5.4 months to clear the supply of houses on the market, down from 5.5 months in October.