December New Home Sales Lower Than Expected

Washington, DC, Jan. 29, 2009--Sales of new homes hit a record low in December, the Commerce Department estimated Thursday.

Sales fell 14.7% in December to a seasonally adjusted annual rate of 331,000. This is the lowest level since the series began in 1963.

Sales were weaker than the 390,000 annualized pace expected by economists. In addition, sales in November were much lower.

Inventories of unsold homes have fallen every month this year, and fell 10% in December. But because of the slow sales pace, the inventory represented 12.9 months supply, up from 12.5 months in November.
 
The median sales price in December was $206,500, down 9.3% compared with a year earlier. The median sales price can be affected by the mix of homes sold from region to region and among different price points.
 
Most economists expect home sales to fall further, at least temporarily, because of the credit crunch.
 
The government cautions that its housing data are subject to large sampling and other statistical errors. Large revisions are common. The standard error of 12% is so high, in fact, that the government cannot be sure in most months whether sales rose or fell.