New-Homes Sales Hit 12-Year Low in Dec 2007

WASHINGTON - January 28, 2008 - New-home sales tumbled to the lowest mark in 12 years during December and prices also fell sharply.

Sales of single-family homes decreased by 4.7% last month to a seasonally adjusted annual rate of 604,000, the Commerce Department said Monday. November new-home sales fell 13% to an annual rate to 634,000; originally, the government said November sales fell by 9.0% to 647,000.

Economists forecast December sales at an annual rate of 650,000. The pace of 604,000 was the worst since 559,000 in February 1995.

Year-to-year, new-home sales were 41% lower than the level in December 2006.

The median price of a new home decreased by 10% to $219,200 in December from $244,700 in December 2006. The average price dropped by 12% to $267,300 from $301,900 a year earlier. In November this year, the median price was $245,900 and the average was $311,200.

The ratio of new houses for sale to houses sold rose during December, going to 9.6. It was 9.4 in November; originally, the government estimated the November ratio at 9.3. But inventories fell; Monday’s data showed an estimated 495,000 homes for sale at the end of December, down from November’s 502,000.

Regionally last month, new-home sales decreased 6.5% in the South, 1.2% in the Midwest, and 6.0% in the West. Sales rose 6.0% in the Northeast.

An estimated 42,000 homes were actually sold in December, down from 46,000 in November, based on figures not seasonally adjusted.

For the full year, sales of new homes dropped by 26.4% last year to 774,000. That marked the worst sales year on record, surpassing the old mark of a 23.1% plunge in 1980.

New-Homes Sales Hit 12-Year Low
By JEFF BATER | Copyright 2008 Wall Street Journal