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Home Sales Up, But Prices Dip

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Dec 28, 2006 10:23 am US/Eastern

Home Sales Up, But Prices Dip

CBS News Interactive: Eye On The Economy

WASHINGTON (AP) ―

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Sales of existing homes managed to eke out a small increase in November but the price of homes sold fell for a record fourth consecutive month, a real estate trade group reported Thursday.

The National Association of Realtors reported that sales of previously owned homes rose 0.6 percent in November to a seasonally adjusted annual rate of 6.28 million units. That followed a 0.5 percent sales increase in October and marked the first back-to-back sales gains since the spring of 2005.

The slight increases in sales were not enough to halt a slide in home prices. The median price for an existing home sold in November dropped to $218,000, down 3.1 percent from the price a year ago. It was the first time on record that sales prices compared to a year ago have fallen for four straight months.

In other economic news, the Conference Board reported that consumer confidence posted a solid gain in December, rising to 109.0 compared to a November reading of 105.3.

A third report showed that the number of Americans filing new claims for unemployment benefits edged up to 317,000, an increase of 1,000 from the previous week, a smaller gain than economists had expected.

The report on existing home sales offered further hope that the serious slump in housing that has occurred this year may be bottoming out.

It followed a report Wednesday that showed that new home sales rose 3.4 percent in November, the third gain in the past four months.

David Lereah, chief economist for the Realtors, said he believed that September's sales activity may represent the low point for sales this cycle but he cautioned that home prices would probably continue declining for a few more months.