Posted on: Friday, December 24, 2004
November new home sales tumble
By Courtney Schlisserman
Bloomberg News Service
WASHINGTON — U.S. sales of new homes fell 12 percent in November, the sharpest decline in more than a decade, and the price of a new house was the lowest in almost a year, the Commerce Department reported yesterday.
Associated Press library photo • November 2004 Sales of new and previously owned houses nonetheless are headed for a record year. Yesterday's figures, combined with a drop in housing starts, suggest that a round of interest-rate increases the Federal Reserve began in June may temper demand.
The prospect of "steadily rising rates has already begun to chill the housing sector," said Anthony Chan, an economist at JP Morgan Fleming Asset Management in Columbus, Ohio.
Other economic reports yesterday were more positive. Consumer confidence rose this month.
Consumer spending, personal incomes, and factory orders for durable goods increased in November. A rise in initial jobless claims last week was too small to erase the previous week's decline.
Sales of new homes also may have been depressed by the dismal weather. November was the fifth wettest on record, according to the National Climatic Data Center in Asheville, North Carolina
The annual sales pace dropped to 1.125 million single-family houses last month after climbing in October to a record 1.278 million, higher than previously estimated. The median price dropped to $206,300 from $224,700.
Cecill Lopez works on a home in Summerlin, Nev. Despite a drop in new-home sales last month, sales are headed for a record year.
