WASHINGTON – Purchases of previously owned homes climbed in December for the first time in five months as job gains and healthier household balance sheets helped Americans adjust to higher mortgage rates.
Sales rose 1 percent to a 4.87 million annual pace, less than projected, figures from the National Association of Realtors showed Thursday in Washington. Purchases in the Northeast and Midwest fell, which may have reflected bad weather, the group said. The median forecast of economists in a Bloomberg survey called for a 4.93 million rate.
The gain capped the strongest year for the industry since 2006, a sign faster employment growth and a decline in consumer debt helped give buyers more confidence to make purchases. Builder confidence has also picked up along with new construction, signaling housing will be a source of strength for the economy this year.
“We might have seen a stronger increase if it wasn’t for bad weather,” said David Sloan, a senior economist at 4Cast Inc. in New York, who correctly projected the December sales pace. “There is sufficient tightness in the housing market” to encourage construction, he said. “Overall, the housing market has got solid underpinnings.”
Estimates in the Bloomberg survey of 76 economists ranged from a sales pace of 4.8 million to 5.1 million. November’s figure was revised to 4.82 million from a previously reported 4.9 million. Purchases increased 9.1 percent in 2013 to 5.09 million.
Another report on Thursday showed applications for unemployment benefits held near a six-week low, showing firings remain muted following the holidays. Jobless claims rose by 1,000 to 326,000 in the period ended Jan. 18, the Labor Department said in Washington.
Stocks dropped as a gauge of China’s manufacturing contracted. The Standard & Poor’s 500 Index declined 1 percent to 1,826.44 at 10:56 a.m. in New York.