WASHINGTON, Jan. 27 - Sales of newly built, single-family homes fell 7.6 percent in December to a seasonally adjusted annual rate of 342,000 units, according to figures released by the U.S. Commerce Department today.
"As expected, the road to a housing recovery is proving to be a very bumpy ride," said Bob Jones, a home builder from Bloomfield Hills, Mich., and newly elected chairman of the National Association of Home Builders (NAHB). "Although purchasing conditions for new homes are extremely favorable thanks to the expanded home buyer tax credit and historically low interest rates, the sobering realities of a weak economy and job market continued to drag on consumers' willingness to go forward with a purchase near the end of 2009. We do, however, expect more buyers to begin taking advantage of the new tax credit in the coming months."
"December's shortfall in new-home sales is not that surprising, given the fact that it was still too early for most consumers to know about and act upon the newly extended home buyer tax credit," noted NAHB Chief Economist David Crowe. "It is also likely that some sales that might otherwise have taken place at the end of the year were pulled forward to earlier months to take advantage of the previous tax credit that expired at the end of November, thereby exacerbating the December decline. That said, we are looking forward to the newly extended and expanded home buyer tax credit beginning to have a positive impact on buyer demand going forward."
Regionally, sales of new single-family homes were quite mixed in December. Displaying typical month-to-month volatility, the Northeast posted a 42.9 percent gain, the Midwest registered a 41.1 percent decline, the South posted a 7.3 percent decline and the West generated a 5.2 percent gain.
Meanwhile, the number of newly built homes on the market dropped from November's 235,000 units to 231,000 units in December. This is the lowest inventory number in nearly 40 years. Because of December's slower sales pace, the months' supply rose from 7.6 in November to 8.1 in December.
On an annual basis, year-end figures from the Commerce Department revealed that an estimated 374,000 new homes were sold in 2009. This was down nearly 23 percent from the previous year and was the lowest number of new-home sales since the government started keeping track in 1963.