November New Homes Sales See Significant Drop

By Gregory V. Harris

WASHINGTON D.C. ?EUR??,,????'??+ New-home sales plunged by 12 percent in November from the previous month, the biggest drop since January 1994, the Commerce Department recently reported . The decline left sales at a seasonally adjusted annual rate of 1.1 million units. The drop, the first since July, followed a 4.2 percent increase in October. The government revised October?EUR??,,????'???s single-family home sales pace upward to 1.278 million units, and the October-November average is above the pace for the first three quarters of the year. ?EUR??,,????'??Builders across the country remain very upbeat about the single-family housing market,?EUR??,,????'?? said Bobby Rayburn, president of the National Association of Home Builders (NAHB) ?EUR??,,????'??The NAHB/Wells Fargo Housing Market Index, based on our monthly surveys of single-family builders, indicated that all the fundamentals are in place for strong months ahead.?EUR??,,????'?? The inventory of new homes for sale moved up 2.2 percent to 418,000 units in November. This represents a 4 1/2-month supply at the current sales rate, the highest since early 2003. However, the rise in the inventory of unsold new homes entirely reflected homes that have been permitted but not yet started. The inventory of homes under construction or completed was virtually unchanged. ?EUR??,,????'??The current inventory situation is not worrisome, but builders obviously should be keeping the numbers of units that are under construction or completed under close control as we move into 2005, particularly as the Federal Reserve continues its steadfast campaign of monetary tightening,?EUR??,,????'?? NAHB Chief Economist David Seiders said. By region, sales in the Northeast, Midwest and West declined for the month. The Northeast dropped 7.1 percent, the Midwest posted a 39.4 percent decline and the West fell 27.9 percent. Sales in the South increased 13.6 percent for the month. The average price of a new home in November was $268,100, the lowest since September. The median sales price - where half sell for more and half for less - was $206,300, the lowest since December 2003. Total New Houses Sold During Period: 1,125,000 Percent change from last month: -12.0 Percent change from last year: +3.6 New Houses Sold During Period By Construction Stage?EUR??,,????'??+Survey: Total sold: 81,000 Homes sold but not started: 33,000 Homes sold and under construction: 25,000 Homes sold and completed: 23,000 Houses Sold by Sales Price: % Distribution?EUR??,,????'??+Survey Total: 81,000 100% Under $100,000 5,000 6% $100,000 - $124,999 7,000 8% $125,000 - $149,999 10,000 13% $150,000 - $199,999 15,000 19% $200,000 - $249,999 13,000 16% $250,000 - $299,999 17,000 9% $300,000 and over 23,000 29% (Percentages may not add up to 100 due to rounding)