U.S. home resales posted their sharpest drop in five years in November, a potential warning sign for the health of the U.S. economy. Bobbi Rebell reports.
A surprise ten and a half percent plunge in the number of home resales last month. That comes on top of October, when it fell more than four percent. The National Association of Realtors said existing home sales tumbled to their lowest annual level since April 2014. That was a change in direction given recent data showing strength in housing starts and new home sales. Homebuilder sentiment has also been bullish as well. Investors mostly shrugged off the numbers though, with stocks of homebuilders, such as DR Horton, KB Home, and Toll Brothers, rising during the trading day. And John Lonski, Moody's Capital Markets chief economist says not to take this result too seriously. (SOUNDBITE) JOHN LONSKI, MANAGING DIRECTOR AND CHIEF ECONOMIST, MOODY'S CAPITAL MARKETS (ENGLISH) SAYING: "The argument is that November's number on existing home sales was skewed lower by new government regulations that strutted out or delayed the closing of a contract to purchase a home. That being said, the takeaway still is, that housing is not robust enough so that we have reason to believe the U.S. economy can tolerate a significantly higher ten-year Treasury yield. " That yield is tied to the Federal Funds rate. Lonski's point? A number like this could give central bank policy makers one more reason to hold off on further rate increases. Also of note: prices may have discouraged some buyers. The median price of an existing home rose by 6.3 percent year over year to $220,300.