Sales of Homes, Old and New, Continue to Fall

Sales of newly built U.S. single-family homes slowed in November to the weakest levels since 1991, according to Commerce Department data on Tuesday that offered fresh evidence of housing market distress.

AP

The seasonally adjusted annual sales pace of 407,000 was down 2.9 percent from October and was the lowest rate since January, 1991.

Economists polled by Reuters had forecast sales would notch a 420,000 rate compared with a downwardly revised 419,000 in October, previously reported as 433,000.

The median sales price rose to $220,400 from $214,600 in October. The median marks the half-way point, with half of all houses sold above that level and half below.

Economists believe the U.S. housing market will not begin to recover until home prices fall far enough to stimulate demand that whittles down the overhang of unsold homes accumulated since real estate weakened sharply last year.

Inventories of new homes for sale fell 7.0 percent to 374,000 in November, bringing the number of homes for sale to the lowest level since February, 2004.

At the current pace of sales, this means it would take 11.5 months to clear stocks of completed but unsold new homes, down from 11.8 months at October's sales pace.

Home sales in November compared with the same month last year were down 35.3 percent, while inventories of unsold homes have been reduced by a record 25.5 percent over the same period, the Commerce Department said.

Meanwhile, the pace of existing home sales plunged a record 8.6 percent in November to a 4.49-million-unit annual rate, while the median home price dropped for a fifth straight month to $181,300, a National Association of Realtors report showed on Tuesday.

The median home price fell 13.2 percent on an annual basis, the largest drop since NAR began keeping records in 1968 and probably the largest since the Great Depression, Lawrence Yun, NAR chief economist told reporters.

Economists polled by Reuters were expecting home resales to set a 4.90-million pace. October's figure was revised downwards to 4.91 million, from 4.98 million.

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