New home sales fell 7.3 percent last monthBy MARTIN CRUTSINGER
THE ASSOCIATED PRESS | January 26,2013AP PHOTO
In this Dec. 20, 2012 photo, a sign hangs in North Andover, Mass., where a house is under construction.WASHINGTON — Sales of new U.S. homes cooled off in December compared with November but for the entire year were the best since 2009.
The Commerce Department said Friday that new-home sales fell 7.3 percent last month to a seasonally adjusted annual rate of 369,000. That’s down from November’s rate of 398,000, which was the fastest in 2˝ years.
For the year, sales rose nearly 20 percent to 367,000. That’s the most since 2009, although the increase is coming off the worst year for new-home sales since the government began keeping records in 1963. Sales are still below the 700,000 level that economists consider healthy.
The housing market began to recover last year, roughly five years after the housing bubble burst. Stable job gains and record-low mortgage rates encouraged more people to buy homes. Prices have been rising on a sustained basis. And builders started to increase construction of new homes, partly because the supply of homes had thinned to extremely low levels.
Jennifer Lee, a senior economist at BMO Capital Markets, said the December decline in sales of newly built homes wasn’t cause for worry. She still expects sales to improve this year.
In a note to clients, she points out that figures for November, October and September were revised higher. And many buyers may have held off last month because of uncertainty over taxes. The White House and Congress reached a deal on Jan. 1 to keep income taxes from rising on most Americans.
“Take December’s drop with a grain of salt, especially given all of the uncertainty about what will happen to taxes in the new year,” Lee said. “And with new mortgage applications already picking (up) in the first three weeks of January, we should see a better report next month.”
For December, new-home sales fell 29 percent in the Northeast, 11 percent in the West and roughly 8 percent in the South. Only the Midwest showed strength, with sales rising 21.3 percent.
The median price for a new home rose in December to $248,900, up 1.3 percent from November and 13.8 percent from December 2011.
The supply of homes for sale also inched up to 151,000 — the most in a year. Fewer homes for sale have helped drive prices higher and made many markets more competitive. They have also encouraged more homebuilding.
The housing market has a long way back to a full recovery. But most economists expect the recovery will strengthen in 2013.
One reason is more people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.
Though new homes represent less than 20 percent of the housing sales market, they have an outside impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenues, according to data from the National Association of Homebuilders.
The gains in home building helped boost construction hiring in December by 30,000 jobs, the most in 15 months.MORE IN National / World BusinessWASHINGTON — Pressure is on Congress to act in the next two weeks on several problems, from... Full StoryNEW YORK — Solid earnings for a range of big companies helped nudge the stock market higher on... Full Story
- Most Popular
- Most Emailed
- TODAY'S WEATHER MINUTE: Rutland Herald content editor Rich Alcott shares local weather information and easily digestible news tidbits: America's feet getting bigger than ever, and Americans keep jamming their feet into small sized shoes. Wake up, America!
- RICHARD'S POOR ALMANACK: Vanessa Williams resigns from Miss America pageant after Bob Guccione publishes nude photos of her in Penthouse magazine and Hefner takes the high road; on this day in 1995, Alan Hale and Thomas Bopp discover a new comet.
- TOMORROW'S HEADLINES TODAY: Brandon voters decide fate of proposed budget, calls to police for service on complaints have fallen to new low, city woman who spray painted a response to vandals on her sidewalk is cited for mischief.
- TODAY'S WEATHER MINUTE: Rutland Herald content editor Rich Alcott shares local weather information and easily digestible news tidbits: When all the big mammals are rubbed out and a faint geologic memory, rats the size of human beings will stalk the Earth.
- TOMORROW'S HEADLINES TODAY: National survey ranks Vermont kids' well-being in second place, Springfield takes up anti-loitering ordinance, Rutland debate taxis, Fair Haven woman is arrested in Rutland for prostitution.
- TODAY'S WEATHER MINUTE: Rutland Herald content editor Rich Alcott shares local weather and news: Research scientists say schizophrenia and marijuana use linked. Are marijuana smokers schizophrenic or are schizophrenics more disposed toward marijuana use?