Sales of existing homes up, market still sluggish

Meanwhile, the number of previously owned homes on the market fell 4 percent to 3.71 million, meaning it would take 9.5 months to sell those houses, compared with 10.5 months in October.

Low mortgage rates have helped push up sales slightly — the steady monthly increases follow one of the worst summers for sales in more than a decade. This year is shaping up with the lowest sales since 1997, down to a 4.8 million pace, as a high rate of unemployment continues to weigh heavily on the market, NAR said.

Still, some housing analysts are encouraged by the improvement in the numbers, even if they're slow to bounce back. 

"Continuing gains in home sales are encouraging, and the positive impact of steady job creation will more than trump some negative impact from a modest rise in mortgage interest rates, which remain historically favorable," said Lawrence Yun, NAR's chief economist.

Yun said he expects purchases to rise to 5.2 million in 2011, which he called a "sustainable" pace.

"The relationship recently between mortgage interest rates, home prices and family income has been the most favorable on record for buying a home since we started measuring in 1970," he said. "Therefore, the market is recovering, and we should trend up to a healthy, sustainable level in 2011."

Still, some housing market analysts have cast doubt on how quickly the market will improve in the next few years, saying they expect the pace to remain sluggish, especially as foreclosures remain high. 

An improvement in job creation and home prices will likely provide the best stimulus to the market, with more people able to purchase homes and others who are in homes with no equity able to sell. 

All four regions saw sales increases last month, with the West leading the way with a 12 percent gain, the report showed. 

The median price increased to $170,600 last month from $170,000 in November 2009.

Purchases of single-family homes climbed 6.7 percent to a 4.15 million annual rate in November from a month earlier, the group said. Sales of condominiums and townhouses dropped 1.9 percent.