New-Home Sales
Hit 12-Year Low

New-home sales tumbled to the lowest mark in 12 years during December and prices also fell sharply.

Sales of single-family homes decreased by 4.7% last month to a seasonally adjusted annual rate of 604,000, the Commerce Department said Monday. November new-home sales fell 13% to an annual rate to 634,000; originally, the government said November sales fell by 9.0% to 647,000.

Economists forecast December sales at an annual rate of 650,000. The pace of 604,000 was the worst since 559,000 in February 1995.

Year-to-year, new-home sales were 41% lower than the level in December 2006.

The median price of a new home decreased by 10% to $219,200 in December from $244,700 in December 2006. The average price dropped by 12% to $267,300 from $301,900 a year earlier. In November this year, the median price was $245,900 and the average was $311,200.

The ratio of new houses for sale to houses sold rose during December, going to 9.6. It was 9.4 in November; originally, the government estimated the November ratio at 9.3. But inventories fell; Monday's data showed an estimated 495,000 homes for sale at the end of December, down from November's 502,000.

Regionally last month, new-home sales decreased 6.5% in the South, 1.2% in the Midwest, and 6.0% in the West. Sales rose 6.0% in the Northeast.

An estimated 42,000 homes were actually sold in December, down from 46,000 in November, based on figures not seasonally adjusted.

Email your comments to rjeditor@dowjones.com.