November New Home Sales Down Unexpectedly

Washington, DC, Dec. 23, 2009--New Home sales unexpectedly fell in November, indicating a housing recovery may be slow to develop.

Purchases dropped 11 percent to an annual pace of 355,000 after a 400,000 rate in October that was lower than previously estimated, the Commerce Department said.

The median sales price decreased 1.9 percent from November 2008.

The prospect that a government tax incentive would expire, combined with a 10 percent jobless rate and competition from foreclosed properties hurt builders.

Sales were projected to climb to a 438,000 annual pace from an originally reported 430,000 rate in October, according to economists.

The median price of a new home in the U.S. decreased to $217,400, from $221,600 a year earlier.

Sales of new homes were down 9 percent from November 2008.

New home purchases, while accounting for less than 10 percent of the housing market, are considered a timely indicator because they are based on contract signings.