New home sales fell in Dec., sales for year up

WASHINGTON — Sales of new U.S. homes cooled off in December compared with November but for the entire year were the best since 2009.

The Commerce Department said Friday that salesof new homes fell 7.3 percent last month to a seasonally adjusted annual rate of 369,000. That’s down from November’s rate of 398,000, which was the fastest in 2 ½ years.

For the year, sales rose nearly 20 percent to 367,000. That’s the most since 2009, although the increase is coming off the worst year for new-home sales since the government began keeping records in 1963. Sales are still below the 700,000 level that economists consider healthy.

The housing market began to recovery last year, roughly five years after the housing bubble burst. Stable job gains and record-low mortgage rates encouraged more people to buy homes. Prices have been rising on a sustained basis. And builders started to increase construction of new homes, partly because the supply of homes had thinned to extremely low levels.

Jennifer Lee, a senior economist at BMO Capital Markets, said the December decline in sales of newly built homes wasn’t cause for worry. She still expects sales to improve this year.

In a note to clients, she points out that figures for November, October and September were revised higher. And many buyers may have held off last month because of uncertainty over taxes. The White House and Congress reached a deal on Jan. 1 to keep income taxes from rising on most Americans.

“Take December’s drop with a grain of salt, especially given all of the uncertainty about what will happen to taxes in the new year,” Lee said. “And with new mortgage applications already picking in the first three weeks of January, we should see a better report next month.”

For December, new-home sales fell 29 percent in the Northeast, 11 percent in the West and roughly 8 percent in the South. Only the Midwest showed strength, with sales rising 21.3 percent.

The median price for a new home rose in December to $248,900, up 1.3 percent from November and 13.8 percent from December 2011.

The supply of homes for sale also inched up to 151,000 — the most in a year. Fewer homes for sale have helped drive prices higher and made many markets more competitive. They have also encouraged more homebuilding.

The housing market has a long way back to a full recovery. But most economists expect the recovery will strengthen in 2013.

One reason is more people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.

Though new homes represent less than 20 percent of the housing sales market, they have an outside impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenues, according to data from the National Association of Homebuilders.

The gains in home building helped boost construction hiring in December by 30,000 jobs, the most in 15 months.

More in Herald Business Journal

Glitches slow Boeing, SpaceX plans for human spaceflight

Boeing has an issue with its abort system that may cause the spacecraft to “tumble.”

Best foot forward: Ferndale company to make custom shoes easy

Long specializing in insoles, Superfeet is putting 3-D machines in stores to make customized shoes.

Planemaker joins forces with auto-industry supplier Adient

The new venture poses a threat to Zodiac Aerospace and Rockwell Collins

Alaska Airlines has selected destinations for new service from Paine Field. (Alaska Airlines)
Alaska Airlines will fly from Everett to 8 West Coast cities

Two destinations that didn’t make the list were Spokane and Hawaii.

Port of Everett CEO Les Reardanz has been called up and will be spending much of the year away from his office. He is going to Afghanistan. (Dan Bates / The Herald)
Port of Everett CEO reporting for duty — in Afghanistan

Les Reardanz has been called to active duty with the Navy for an eight-month deployment.

Boeing opens new $17 million training center in Auburn

Workers and dignitaries marked the grand opening of the facility Monday.

Trump’s company fights efforts to shed the president’s name

“Our homes are worth more without the Trump name.”

Airbus floats shutdown of A380 superjumbo

The aircraft is so big that some airports had to expand runways to accommodate the 550-seat plane.

Does a hypersonic US reconnaissance plane already exist?

A Skunk Works executive speaks of the top secret aircraft as if it is already in operation.

Most Read