U.S. existing home sales rise for second straight month in November

U.S. existing home sales rose for the second consecutive month. Sales were up 1.9 percent to 5.32 million units in November. The rebound in sales defied the median consensus forecast for a 0.4 percent pullback. Component wise, single-family sales were up 1.9 percent on the month, while the condo/co-op segment rose 1.7 percent. In all, sales rose 3.3 percent from their low in September, but are still down 7 percent from year-ago levels, with single-family down 6.7 percent and condo/co-ops down 9 percent year-on-year.

The number of home available for sale dropped to a seasonally unadjusted 1.74 million units from 1.85 million in October, which at the current sales rate, puts supply at just 3.9 months. Median existing home prices rose 4.2 percent year-on-year, accelerating from 3.7 percent in October.

This is an encouraging report. Expectations for home sales have been beaten down by many months of declines, noted TD Economics in a research report.

“Assuming a more staid pace of increases from the Federal Reserve, we expect only a modest 20 basis points in additional rate increases over the next year, small change compared to the 90 basis points that have occurred in the past year”, said TD Economics.

Inventory levels that continue to be near historical lows will continue to be a constraint to housing activity, and keep upward pressure on prices even with comparatively modest demand. This should also encourage more housing construction and activity over the next year, added TD Economics.

At 18:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at -4.20519. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex