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US sales of new homes decline for 2nd month
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US sales of new homes fell in December for a second consecutive month but even with the pause at the end of the year, sales for all of 2013 climbed to the highest level in five years.
Sales of new homes dropped 7 percent in December to a seasonally adjusted annual rate of 414,000, the Commerce Department reported yesterday. In November, sales had fallen 3.9 percent.
For the whole year, sales jumped 16.4 percent to 428,000, the highest level since 2008.
It marked the second year that sales have increased after six consecutive annual declines as the housing industry was rocked by the collapse of a housing bubble. Sales of new homes peaked at 1.28 million in 2005. Analysts expect further sales gains in 2014.
The median price of a new home was US$270,200 in December, up 4.6 percent from a year ago and up 0.6 percent from November. The median is the point where half the homes sell for more and half for less.
There were 171,000 new homes on the market at the end of December, a drop of 2.8 percent from November. At the December sales pace, that would represent a five-month supply. That is lower than the six-month supply that economists view as healthy.
Housing was one of the strongest sectors of the recovery in the first half of 2013, but then it hit a lull during the summer when mortgage rates jumped on indications the Federal Reserve might soon start reducing the bond purchases it was making to keep long-term interest rates low.
But analysts are looking for housing to regain some of its lost momentum as the industry enters the all-important spring buying season. Analysts expect that continued improvements in the labor market will boost incomes and that will lead to stronger demand for homes.
Sales of previously occupied homes rebounded 1 percent in December, helping that market to post sales of 5.09 million for 2013.
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