By Vicki Needham - 12/23/11 06:00 PM EST
"Our concern is that overly restrictive lending conditions for both builders and buyers will constrain this growth and postpone the arrival of a recovery in housing and the overall economy."
Sales of previously owned homes hit a 10-month high in November as the inventory dropped to the lowest level in six years, the National Association of Realtors reported on Wednesday.
But despite sales rising to 4.42 million units, they are still well below the 6 million that economists say mean the market is shoring up and only slightly ahead of 2008's revised totals — the worst in 13 years.
In 2010, only 323,000 new homes were sold — the worst performance since 1963.
That puts all the pressure on December sales to prop up the number, which is unlikely.
Even record-low mortgage rates can't boost sales — 30-year loans dropped to the lowest level on record this week, with the average rate falling to 3.91 percent, the lowest since 1971, according to Freddie Mac.
The average 15-year rate matched last week's all-time low of 3.21 percent.
"Extremely favorable mortgage rates and prices are starting to lure buyers back to the market in select areas of the country where the economy is strengthening," said Robert Denk, NAHB's senior economist.
"As a result of this improving demand and the limited amount of new construction that is taking place, inventories of new homes for sale continued to fall to another all-time record low in November," he said.
"Such limited supplies should eventually lead to some greater building activity in those improving markets, which in turn will boost job growth and further economic gains."
Although new homes are only about 20 percent of the housing market, they pack a powerful economic punch, with each new home creating three jobs, on average, and about $90,000 in taxes, according to the NAHB.
Economists note that housing is struggling to recover and that many people are opting to rent because they can't afford to buy or don't feel a home is a wise investment right now.
The inventory of new homes for sale fell 1.3 percent to a record-low 158,000 units in November — a six-month supply at the current sales pace.
The median sales price of a new home dropped nearly 4 percent last month, to $214,100.
Results were mixed around the country in November. The South and Midwest posted gains of 12.9 percent and 7.5 percent, respectively, while the Northeast and West posted respective declines of 26.3 percent and 16.9 percent.