Triangle home sales continued their swoon in November as activity returned to levels seen two years ago, during the depths of the recession.

For the second consecutive month, home sales in Durham, Johnston, Orange and Wake Counties were down 40 percent from the same period a year ago, Triangle Multiple Listing Services data show. The figures are an important indicator of the local economy's strength and reinforce that many consumers remain reluctant to make major purchases.

Through the first 11 months of the year, local home sales were down 7 percent compared to a year ago.

The steep declines during the past two months reveal a market struggling to find a bottom without the help of government incentives. At this time last year, many buyers were rushing to take advantage of a first-time home buyer tax credit they thought would soon expire.

The Triangle, like most markets, has seen a sharp drop in sales activity since the tax credits expired this summer.

"We've just got to have it where consumers have some level of confidence," said John Wood, a Re/Max United agent in Cary. "That still does not exist across the board."

The slowdown, and the corresponding inventory of homes that has built up, is putting pressure on buyers to price aggressively if they hope to sell.

While the average sales price of $256,400 in November was 14 percent higher than it was a year ago, that is not a sign that home values are rising. It simply reflects the fact that many of the buyers last year were first-time buyers purchasing more affordable homes.

Wood said he talks to lots of sellers who are teetering between pricing their house in the low $400,000s or the high $300,000s. He advises them to choose the latter.

"There is no sense in you trying to get $420,000," Wood said. "You need to go $399,000 and it will sell. You put it at $420,000 and it will sit."

Among the few bright spots in the November data was pending sales, which were up 10 percent compared to a year ago. Wood said some of that activity might be driven by the recent volatility in mortgage rates.

In the past five weeks, rates on both the 30-year and 15-year fixed mortgage have risen more than a half-percentage point from historic lows. The average rate on a 30-year fixed mortgage rose to 4.83 percent from 4.61 percent just in the past week.

A one percentage point increase in mortgage rates would add about $120 to the monthly payments on a $200,000 mortgage.

It's difficult, if not impossible, to calculate how many potential buyers could be priced out of the market if interest rates continue to rise. That's particularly true since low rates have largely failed to spur activity in recent months.

Stacey Anfindsen, a Cary appraiser who analyzes MLS data for the Triangle, said he expects the number of people would be relatively small. He noted that even if rates rise another point or more, they will still be at historically low levels.

"If an interest move up by a half-percent knocks you out of a house, I'm not sure you should be buying the house," he said.

david.bracken@newsobserver.com or 919-829-4548