New Home Sales Dip in December to End Worst-Ever Year

(MarketWatch) - Sales of new homes retreated in December, perhaps a fitting end to a year which saw a new record low level of sales.

Sales fell 2.2 percent in December to a seasonally-adjusted annual rate of 307,000, the Commerce Department reported Thursday.

The decline brings sales back to its level in October, wiping out a gain in November where sales had risen to their highest level since April.

Economists expected a further gain in sales in December after the strong rise in November, according to a MarketWatch survey.

Several factors, including warm weather at the end of last year, along with low interest rates and aggressive discounting by builders were expected to help boost sales.

By region, sales jumped 46.7 percent in the Northeast in December. Sales also rose nine percent in the West, while sales fell 10.1 percent in the South and fell 3.7 percent in the Midwest.

For all of 2011, sales of new homes fell 6.2 percent to a record-low level of 302,000. Sales of new homes peaked at 1.28 million in 2005. The records date back to 1963.

In December, the supply of new homes fell 0.1 percent to 157,000. The supply in relation to sales rose slightly to 6.1 months in December from six months in November.

Median sales prices have fallen 12.8 percent in the past year to $210,300. This is the lowest level since October 2010.

The government cautions that its housing data are subject to large sampling and other statistical errors. Large revisions are common.

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