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

Aerospace workers adjust to changing industry

The number of Boeing workers dropped almost 10 percent since last year.

Tom Hoban
Are millennials warming up to life in suburbia?

They dominate the apartment market and their wants need to be accounted for, says columnist Tom Hoban.

Camano artist mixes flask, paintings for successful cocktail

Art flasks prove popular as bachelorette gifts, birthday presents and wedding favors.

Fluke’s T6 Electrical Testers receives Innovation Awards honor

Fluke’s T6 Electrical Testers have received top honors in the Tools and… Continue reading

Everett volunteer named ‘community champion’ by Molina Healthcare

Everett’s Jorge Galindo was one of seven people across the state to… Continue reading

Cascade Valley Health to hold Festival of Trees in Arlington

Cascade Valley Health Foundation will be holding their fifth annual Festival of… Continue reading

7-Eleven program helped add 500 trees, shrubs to Everett park

Last month, 7-Eleven helped plant more than 500 trees and shrubs at… Continue reading

Pentagon inspector general praises secret $80 billion bomber

US Government Accountability Office in 2016 rejected a protest filed by Boeing-Lockheed Martin.

Everett’s Sentry Credit celebrates a quarter century in business

Sentry Credit Inc. in Everett is celebrating its 25th year in business.… Continue reading

Most Read