New-Home Sales Drop in November

December 26, 2013

Sales of new single-family homes dropped 2.1 percent in November, according to the Commerce Department's latest new-home sales report, which was released Tuesday. New-home sales reached a seasonally adjusted annual rate of 464,000 units for the month.  

Still, that's up 16.6 percent from November 2012, and last month’s numbers were close to October’s revised sales pace of 474,000 units — the highest level for home sales since July 2008.

“The very low supply of new homes on the market and tight credit conditions for home buyers shows that builders are still cautious about getting ahead of themselves,” says Rick Judson, chairman of the National Association of Home Builders. 

Regionally, new-home sales were up in the West by 31.1 percent and the Northeast by 15.2 percent in November. However, new-home sales dropped by 26.6 percent in the Midwest and posted a 9.1 percent decline in the South. 

The report followed a Commerce Department report last week showing that new-home construction hit its fastest pace in five years. Housing inventories, though, remain tight at a 4.3-month supply, with inventories of new homes hovering at a four-and-a-half-year low. 

Source: National Association of Home Builders and “U.S. New Home Sales Fall Modestly From Five-Year Peak, Prices Up,” Reuters (Dec. 24, 2013)

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