Homes sales snap losing streak, jobless claims rise

Thu Jan 23, 2014 3:50pm EST
 
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By Lucia Mutikani

WASHINGTON (Reuters) - U.S. home resales rose in December after three straight months of declines, showing some resilience in the housing market recovery despite higher mortgage rates.

While other data on Thursday showed a marginal rise in first-time applications for unemployment benefits last week and a slowdown in factory activity this month, the deterioration was not enough to change the picture of an improving economy.

"We have an economy that is firing on almost all cylinders and we expect to see a noticeable pick-up in growth in 2014," said Gus Faucher, senior economist at PNC Financial Services Group in Pittsburgh.

Sales of previously owned homes rose 1 percent last month to an annual rate of 4.87 million units, the National Association of Realtors said.

The sales pace, however, was slower than economists' forecast and some blamed frigid weather. Sales fell in the Northeast and the Midwest, which suffered the brunt of cold weather in December.

"The recent housing market slowdown is being exacerbated by transitory factors such as weather," said Gennadiy Goldberg, an economist at TD Securities in New York. "We generally expect housing market activity to accelerate in subsequent months."

Sales in 2013 were the highest since 2006 and prices increased 11.5 percent, the biggest advance since 2005.

Existing home sales lost steam late in the summer as a run-up in mortgage rates and a shortage of properties sidelined potential buyers. December's rise added to pending and new home sales data in offering signs of a tentative pick-up in activity.   Continued...

 
Job seekers wait to meet potential employers at a career fair at Rutgers University in New Brunswick, New Jersey, January 6, 2011. REUTERS/Mike Segar