New Homes Sales for 2007 Post Record Decline

The sales of new houses continued to decline in December according to monthly data jointly released by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.

Sales of new one-family houses during December were consummated at a seasonally adjusted annual rate of 604,000, down 4.7 percent from the revised November rate of 634,000 and 40.7 percent below the December 2006 estimate of 1,019,000.

New home sales in the Northeast showed a 6 percent increase over November. The other regions did not fare as well. Sales were down 1.2 percent in the Midwest, 6.5 percent in the South and 6 percent in the West. Sales in December 2007 compared to December 2006 were down 27.4 percent in the Northeast, 55.8 percent in the Midwest, 36.3 percent in the South, and 42.9 percent in the West.

It was in the year-over-year figures where the picture was really dark. Preliminary figures indicate that 774,000 new homes were sold in all of 2007. This is 26.4 percent fewer than the 1,051,000 sold during 2006. This was the worst sales year on record, surpassing the old "worst" of -23.1 percent set in 1980, a period when interest rates were in double digits.

The median sales price of new houses sold last month was $219,200 and the average price was $267,300. In December 2006 the median and average sales prices were $244,700 and $301,900 respectively. This was the weakest pricing has been in 16 years.

The report estimated that there were 495,000 new homes available for sale at the end of December. At the current sales rate this represents a 9.6 month supply. At the end of November there were 502,000 homes for sale, a 9.4 months supply.

Houses that sold in December were on the market for a median time period of 6.3 months while a builder could have anticipated a median marketing time of 4.3 months one year ago.