New home sales surge in November

WASHINGTON – Sales of new single-family homes rose 12.4% in November, the fastest pace in seven months, as the housing industry continued to benefit from low mortgage rates and strong demand.

The November increase pushed the seasonally adjusted annual sales pace to 744,000 last month, the best showing since reaching 796,000 in April.

The median sales price of a new home sold in November hit $416,900, 14.1% higher than a year ago.

Demand has surged this year as many Americans cooped up by the pandemic seek out larger homes.

The sale of previously occupied homes rose for a third straight month in November to a seasonally adjusted annual rate of 6.46 million units, the fastest pace since January, according to a report this week from the National Association of Realtors.

Extraordinarily low mortgage rates have intensified demand.

Freddie Mac reported Thursday 30-year fixed rate mortgages averaged 3.05% this week, down from last week’s 3.12%.

Mortgage rates are likely to move higher next year as the Federal Reserve phases out the monthly bond purchases it has been making since the pandemic hit nearly two years ago.

The Fed has already signaled that it expects to start raising interest rates as early as next spring to check sharply rising inflation.

But interest rate increases are expected to be modest and the shift higher may actually intensify demand as Americans try to lock in rates before they head even higher.

“Anticipation of higher mortgage rates as the Fed tapers should be supportive of sales over coming months,” predicted Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

For November, sales were up in every region of the country except the Midwest, which saw a 25.4% drop.

New home sales surged 53.2% in the West and were up 15.6% in the Northeast and 2.7% in the South.

Jobless numbers hold steady as omicron spreads

The number of Americans applying for unemployment benefits was unchanged last week, remaining at a historically low level that reflects the job market’s strong recovery from the coronavirus recession last year.

Jobless claims remained at 205,000. The four-week average, which smooths out week-to-week ups and downs, rose to just over 206,000.

The numbers suggest the spread of the omicron variant did not immediately trigger a wave of layoffs.

“Fortunately, there’s no evidence in this data of a new wave of fresh job loss,’’ said Mark Hamrick, senior economic analyst at Bankrate.com.

“The pandemic’s resurgence is affecting the economy. The question is for how long and how much, and it (is) too early to know the answers.”

Altogether, 1.9 million Americans were collecting traditional unemployment aid the week that ended Dec. 11.

The weekly claims numbers, a proxy for layoffs, have fallen steadily most of the year.

Employers are reluctant to let workers go at a time when it’s so tough to find replacements.

The United States had a near-record 11 million job openings in October, and 4.2 million Americans quit their jobs – just off September’s record 4.4 million – because there are so many opportunities.

The job market has bounced back from last year’s brief but intense coronavirus recession.

When COVID-19 hit, governments ordered lockdowns, consumers hunkered down at home and many businesses closed or cut back hours.

Employers slashed more than 22 million jobs in March and April 2020, and the unemployment rate rocketed to 14.8%.

But massive government spending – and eventually the rollout of vaccines – brought the economy back. Employers have added 18.5 million jobs since April 2020, still leaving the U.S. still 3.9 million jobs short of what it had before the pandemic.

The unemployment rate has fallen to 4.2%, close to what economists consider full employment.

From wire reports