U.S. new home sales fall modestly from five-year peak, prices up

WASHINGTON Tue Dec 24, 2013 10:31am EST

A new subdivision project of residential homes in shown in Highland, Maryland September 25, 2013. REUTERS/Gary Cameron

A new subdivision project of residential homes in shown in Highland, Maryland September 25, 2013.

Credit: Reuters/Gary Cameron

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WASHINGTON (Reuters) - Sales of new U.S. single-family homes fell modestly in November from a five-year high and prices pushed higher, indicating the housing market is weathering higher mortgage rates.

The Commerce Department said on Tuesday sales fell 2.1 percent to a seasonally adjusted annual rate of 464,000 units. Despite the fall from October's revised 474,000 pace, which was the highest level since July 2008, home sales retained the bulk of the previous month's revised 17.6 percent increase.

Sales had previously been reported to have increased 25.4 percent in October but to a 444,000 annual pace.

Economists had expected new home sales, which are measured when contracts are signed, to show a 445,000 unit pace in November. Compared with November last year, sales were up 16.6 percent.

Higher mortgage rates have slowed the pace of home resales since August, but activity is expected to accelerate next year, driven in part by employment gains.

Continued recovery in household formation from multi-decade lows, against the backdrop of lean housing inventory, is also expected to boost activity.

Last month, the supply of houses on the market fell 6.7 percent. The median price of a new home rose 10.6 percent from a year ago.

At November's sales pace it would take 4.3 months to clear the supply of houses on the market, the fewest since June. That was down from 4.5 months in October. A supply of 6.0 months is normally considered as a healthy balance between supply and demand.

Sales fell in the Midwest and South, but posted strong gains in the West and Northeast.

(Reporting by Lucia Mutikani; Editing by Krista Hughes)

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Comments (1)
brotherkenny4 wrote:
The education many people receive and the wages they earn are not conducive to being a responsible home owner. Our leaders/owners want people with a mental dependence on them, but those folks are not a strong group in general. It’s the delema that I think our leaders/owners will not be able to solve. That is, how do you make someone dependent mentally and not weaken them to the point of uselessness? I am sure their lawyers egos will make them think they can accomplish subjegation without the production of ineptitude, but they are lawyers, they only render opinions, they have actually never done anything real and only skim their living off the labor of the “weak” people.

Dec 24, 2013 10:26am EST  --  Report as abuse
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