There are concerns that the persistent housing market weakness could spill over to the broader economy, which continues to be bolstered by robust consumer spending.
The softening housing market is not expected to discourage the Federal Reserve from raising interest rates when officials wrap up a two-day policy meeting on Wednesday. The U.S. central bank has increased borrowing costs three times this year.
October's sales pace was unrevised at 5.22 million units. Sales have now increased for two straight months.
Economists polled by Reuters had forecast existing home sales falling 0.6 percent to a rate of 5.20 million units in November. Existing home sales, which make up about 90 percent of U.S. home sales, tumbled 7.0 percent from a year ago in November, the largest annual drop since May 2011.
The housing market is being constrained by higher mortgage rates as well as land and labor shortages, which have led to tight inventory. Though house price inflation has slowed significantly, it continues to outpace wage growth, sidelining some first-time homebuyers.
A survey on Monday showed confidence among single-family homebuilders dropped to more than a 2-1/2-year low in December. Single-family homebuilding dropped to a 1-1/2-year trough in November, government data showed on Tuesday.
U.S. financial markets were little moved by the home resales data as investors awaited the Fed's rate decision and monetary policy projections for 2019.
There were 1.74 million previously owned homes on the market in November, up from 1.67 million a year ago. The inventory crunch is easing as demand slows especially in the West, which has seen a surge in house prices.
At November's sales pace, it would take 3.9 months to exhaust the current inventory, down from 4.3 months in October and up from 3.5 months a year ago. A six-to-seven-month supply is viewed as a healthy balance between supply and demand.
Houses for sale typically stayed on the market for 42 days in November, up from 36 days in October and 40 days a year ago. Forty-three percent of homes sold in November were on the market for less than a month.
According to the NAR, sales were slowing in the upper end of the market. The Realtors group said inventory remained tight on the lower end, which accounts for a large portion of the housing market. (Reporting by Lucia Mutikani; Editing by Andrea Ricci)
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