Dive Brief:
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Home sales ended the year on a low note with an unexpected 1.6% decline in November, the Commerce Department reported on Tuesday.
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The dip brought the number of home sales to its lowest level in four months, capping off a year of sluggish activity in residential real estate and disappointing economists who had predicted a more optimistic year-end showing.
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Industry analysts pointed to the usual culprits for the poor showing: a year of ultra-tight lending standards, rising home prices, a dwindling supply of inventory for sale and reluctant first-time buyers. Still, they said, the prospects for next year are good as more jobs are created and banks ease up on their strict qualifications for mortgage borrowers.
Dive Insight:
New-home purchases tumbled 3.7% last month from November 2013, and the National Association of Realtors said on Monday that sales of existing single-family homes, townhouses, condos and co-ops fell 6.1% from October to November.
Still, the dour news came with a silver lining: 31% of those who did make purchases in November were first-time buyers—more than any month since October 2012.
The percentage of first-timers had been hovering at around 29%. Some bankers and economists have predicted that young, entry-level homebuyers will be a driving force behind improving home sales in 2015.