Nationwide sales of previously owned homes fell 3.5 percent in November compared with October, a sign the housing market may be cooling from its frenetic pace, though industry leaders said sales for the year remain on track to break a record.

The National Association of Realtors said yesterday that existing-home sales fell to a seasonally adjusted annual rate of 5.56 million houses last month, down from a pace of 5.76 million in October - the fourth-highest on record.

The November rate was 5.9 percent higher compared with November 2001 and the sixth-highest in history.

"Even with the present decline, the present level of activity is exceptionally strong," said Walter Molony, a spokesman for the Realtors' group, which is headquartered in Chicago.

And while most industry leaders said they expect the market to soften next year, they still expect healthy sales given historically low mortgage rates.

The value of houses also continues to rise, but most economists said they do not expect a continuation of the almost double-digit pace that many sellers have enjoyed during the past year.

The housing industry has been one of the strongest pieces of an otherwise fickle economy during the past two years. The Realtors group projects sales to top 5.5 million homes this year - 5.3 million were sold in 2001, the current record.

And the Commerce Department said last week that new home sales reached their highest level in November and also are on track to break last year's record.

In the Baltimore metropolitan area, real estate agents predict housing sales will break last year's record since sales are up 2.73 percent this year.

Last month, sales for existing homes increased 0.43 percent compared with November 2001, according to figures collected by the Metropolitan Regional Information Systems Inc., the multiple-listing service in Rockville that tracks sales.

Cindy Ariosa, vice president and Baltimore regional manager for Long & Foster Real Estate Inc., said that through November, her company's sales are 24 percent above last year's, to $21.6 billion. The company is projecting growth rates of between 10 percent and 15 percent for 2003.

"These are phenomenal numbers," Ariosa said. "There is definitely going to be modifications [in 2003] but we're still going to have a very strong year."

The national median home price was up 9.7 percent, to $161,400, in November compared with November 2001. In the Baltimore area, the median sales price was $159,900 - up 18.44 percent from the corresponding period a year ago.

The Realtors' group said housing inventories nationally rose 1.3 percent to 2.34 million homes in November compared with October.

Given those figures, the group expects home values to rise about 4.3 percent next year. The Realtors' group said it expects average values to grow 7 percent this year - the highest rate since 1980 - to about $158,000.

Freddie Mac, the No. 2 buyer of U.S. mortgages, said the average 30-year fixed-mortgage rate was 6.07 percent in November, the lowest it has been since the company began tracking it in 1971.

"The rates are driving the market," said Barbara E. Schmitt, president of the Maryland Mortgage Bankers Association. "People who were on the fence and were waiting and waiting are saying, 'Why wait? I'm going to get more house.' "