US New Home Sales Drop In November

December 23, 2009

WASHINGTON - Purchases of new homes in the US unexpectedly fell last month, leading to speculation that a recovery from the worst housing slump since the Great Depression may be slow to develop.
Purchases dropped 11 per cent to an annual pace of 355,000, figures from the Commerce Department showed today in Washington. The median sales price decreased 1.9 percent from November 2008. The report showed the median price of a new home in the U.S. decreased to $217,400, from $221,600 a year earlier. Sales of new homes were down 9 percent from November 2008.
The prospect that First-time Home Buyer government tax incentive would expire, combined with a 10 per cent jobless rate and competition from foreclosed properties are being blamed for the lion’s share of the decrease.
Construction cutbacks helped bring inventories down. The number of homes for sale fell to a seasonally adjusted annualized rate of 235,000, the fewest since April 1971. The supply of homes at the current sales rate increased to 7.9 months worth.

Sales were down in three of the four major regions last month, led by a 21 per cent plunge in the South, which took purchases in that area down to the lowest level since 1991. The Midwest showed the only increase, gaining 21 per cent.