WASHINGTON – Purchases of new U.S. homes exceeded projections in November, holding near a five-year high and showing the housing recovery was gaining momentum even as mortgage rates climbed.
Sales declined 2.1 percent to a 464,000 annualized pace, following a revised 474,000 rate in October that was the strongest since July 2008, figures from the Commerce Department showed Tuesday in Washington. The median forecast of 75 economists surveyed by Bloomberg called for 440,000.
Home purchases are strengthening as builders respond to pent-up demand unleashed by employment gains and record-high stock prices. Applications for building permits held near a five-year high in October, signaling a pickup in new-home construction will be maintained through the start of 2014.
“You did have a rise in mortgage rates, but house prices are still about 20 percent below the peak, affordability is high, and the labor market is improving,” said Gennadiy Goldberg, an economist at TD Securities USA LLC in New York. “There’s a natural demand for more housing.”
Economists’ estimates in the Bloomberg survey ranged from 390,000 to 475,000. October sales were originally reported as a 444,000 pace. The Commerce Department revised up data for each month back to August.
The market is on pace to reach 435,100 new homes sold this year, the most since 2008, according to Bloomberg calculations.
Another report on Tuesday showed orders for durable goods climbed more than forecast in November, reflecting broad-based gains that signal business investment is rebounding after a third-quarter lull.
Bookings for goods meant to last at least three years rose 3.5 percent after a 0.7 percent drop the prior month, according to Commerce Department data. The median estimate of 75 economists surveyed by Bloomberg called for a 2 percent advance. Excluding demand for transportation equipment, which is often volatile, orders also beat projections.