US home sales hit highest level in almost 11 years as supplies of houses stay tight

US home sales increased more than expected in November, hitting their highest level in nearly 11 years, the latest indication that housing was regaining momentum after almost stalling this year.

The National Association of Realtors said on Wednesday that existing home sales surged 5.6 per cent to a seasonally adjusted annual rate of 5.81 million units last month amid continued recovery in areas in the South ravaged by Hurricanes Harvey and Irma. That was the highest level since December 2006 and followed an upwardly revised 5.50 million-unit pace in October.

Economists had forecast home sales rising 0.9 per cent to a 5.52 million-unit rate in November from a previously reported 5.48 million-unit pace in October. Existing home sales make up about 90 per cent of US home sales. They rose 3.8 per cent on a year-on-year basis in November.

The NAR said sales in the South, which accounts for almost half of the existing homes sales market, increased 8.3 per cent last month. Sales rose 6.7 per cent in the Northeast and jumped 8.4 per cent in the Midwest. They, however, fell 2.3 per cent in the West, which has seen a strong increase in house prices.

Despite the recent gains, existing home sales remain constrained by a chronic shortage of houses at the lower end of the market, which is keeping prices elevated and sidelining some first-time buyers, who accounted for 29 per cent of transactions last month.