November New Home Sales Up But Remain Near Record Lows

The rate of new home sales rose in November to a seasonally-adjusted annual rate of 290,000, a 5.5% increase over a near record low of 275,000 in October.  The level of inventory of unsold new homes reached another low of 197,000, the first time below 200,000 since mid-1968.

The increases were sharply different by region although only the West region showed a change larger than the statistical confidence interval.  The Northeast and Midwest fell 27% and 13% respectively while the South and West rose 6% and 37% respectively.  Every region has shown a rate above and below the November report within the last two years.

The median sales price fell to $213,000 from $218,800 in November 2009 for a 2.7% decline.  The fall was due to a continued shift in homes sold below $200,000.

Collectively, the report foreshadows a total sales number for 2010 around 320,000, which will be 15% below the former record low of 374,000 in 2009.  An improving economy, a return in hiring and continued low, although not record low, mortgage rates will see a rebound in 2011 that should exceed the 2009 levels.



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