An annualised 6.97 units were sold last month, 1.7 per cent down on October. The median price of an existing home was 13.2 per cent higher than a year ago, decelerating from 16.6 per cent in the previous month.
Over the past five years the real value of US housing has risen by 35 per cent, faster than at any time since records started in 1966. This has priced many families out of the market and forced others to accept riskier mortgage products but it has also been the main driver behind economic growth in recent years.
The last few months of data have offered tentative signs that the surge in activity may be drawing to a close.
Thursday's data show that the stock of unsold houses has continued to rise steadily. The number of existing homes for sale is at an all time high, up 14 per cent on the same month last year. At the current rate of sales, it would take 5 months to sell the 2.9m existing homes on the market.
Sales of new homes have also weakened and prices have stagnated.
There was also evidence this week of a decline in mortgage applications for home purchases. These applications, seen by economists as a good leading indicator of activity in coming months, were down by 11 per cent in December compared to the same period last year.
The slowdown in activity may be a response to rising mortgage rates. The interest charged on a 30-year fixed mortgage has climbed from around 5.8 to 6.3 per cent since September. With the yield on US Treasury bonds falling in recent trading sessions, mortgage rates may start to move lower again.
But Nigel Gault, head of US research at Global Insight, a consultancy, said the problem with the housing market was deeper than merely rising interest rates. ''The housing market is starting to sink under its own weight,'' he said. ''Price increases have been too strong for too long and this has pushed housing beyond the means of many families in certain areas of the US.''
Data by the National Association of Realtors suggests that in spite of comparatively low interest rates, housing affordability is at its lowest level in 14 years. The figures show that it is still easy for families in the mid west to secure a mortgage to buy a median house. But in the western region of the US a family on a median income can qualify for a traditional loan that would cover just 80 per cent of the value to buy a median priced home.
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