According to Commerce Department data,
sales of new single-family homes fell more than expected in December, but low
inventories and growth in prices suggest a strong housing market to support the
economy.
The report from the Commerce Department
said new home sales fell 7.0 percent to a seasonally adjusted annual rate of
414,000 units. Sales were at a 445,000-unit pace in November.
The second straight month of declines
in sales was somewhat softened by October's outsized 14.9 percent increase.
Another factor that may have contributed to the declines was the extreme cold
weather that blanketed most parts of the country last month.
Sales in the Northeast, which was hard
hit by frigid temperatures, tumbled 36.4 percent to their slowest pace since
June 2012. Home sales are traditionally weak during the winter, and last
month's cold snap could have exaggerated the magnitude of the slowdown.
Though new home sales stumbled in the
summer in the aftermath of a spike in mortgage rates, they have largely
weathered the higher home loan costs against the backdrop of tight inventories
and improving labor market conditions.
Housing is expected to have contributed
significantly to economic growth last year, through residential investment and
rising home prices that have boosted the net worth of households, allowing for
greater discretionary spending.
For all of 2013, a total of 428,000
single family homes were sold. That was the most since 2008 and represented a
16.4 percent increase from the 2012.
Last month, the supply of houses on the
market fell 2.8 percent to 171,000 units. That was the lowest since July.
The median price of a new home last
month rose 4.6 percent from December 2012. New home prices rose 8.4 percent in
2013, the largest increase since 2005.
For all of 2013, the median new home
price was $265,800, the highest on record.
At December's sales pace it would take
5.0 months to clear the supply of houses on the market. That was up from 4.7
months in November. A supply of 6.0 months is normally considered a healthy
balance between supply and demand.
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