December Decline Dulls Healing Housing Sales

Despite the new home sales rate's decline in December, 2012 was the best year for housing sales and construction since the market decline that precipitated the recession.

The sales rate of new homes cooled in December, but gains made in the preceding months made 2012 the best year for the housing market since the recession ended.

The pace of new home sales dropped 7.3 percent (seasonally adjusted) in December to a 369,000 unit annual rate after a stronger than expected November, according to the Commerce Department's report. November's revised rate was 398,000, the highest monthly pace since August 2009.

For all of 2012, homebuilders sold about 367,000 homes, increasing the sales rate by 19.9 percent year-over-year. The increase is the first annual gain since 2005. New and previously owned property sales last year combined for a 9.9 percent overall increase, the largest yearly increase since 1998.

The report showed the supply of new homes at the current sales rate climbed to 4.9 months, an increase from the 4.5-month supply in November. There were 151,000 new houses on the market at the end of December, up from 149,000 the prior month.