US new-home sales rise modestly in November

Sales of new single-family homes in the United States rose modestly in November as prices increased, according to government data released Wednesday.

New-home sales, a volatile indicator, increased 4.3 percent to an annual rate of 490,000 last month, according to Commerce Department data. That was below the 505,000 projected by analysts.

Median prices advanced to $305,000 from $281,500 in the October report, an indication of tight supply.

Analysts said the data were consistent with a trend in which housing has been modestly supportive of the US economic recovery.

Sophia Kearney-Lederman, economic analyst at FTN Financial, said construction of new homes "has been slower to recover than anticipated, creating tight supply and contributing to rising home prices."

More homes are expected to come on the market in 2016, Kearney-Lederman said.

"Until then, expect new home sales to continue to creep up very gradually, keeping their contribution to growth limited," she said.

With the latest data, the three-month average new home sales has "been flat or declining since February," said Kristin Reynolds, an economist at the consultancy IHS.

"Year-on-year improvements are still occurring, but at a decreasing rate."

Reynolds said new home sales should pick up as the employment picture improves, adding that last week's move by the Federal Reserve to lift interest rates "is anticipated to have only a small impact on the housing market."