WASHINGTON, Dec. 23 -- Underscoring the continued weakness of the nation's housing market, sales of newly built, single-family homes declined 11.3 percent in November to a seasonally adjusted annual rate of 355,000 units, according to figures released by the U.S. Commerce Department today.
"Today's numbers are an indication of the continued fragility of the new-homes market amidst ongoing economic weakness," noted Joe Robson, chairman of the National Association of Home Builders (NAHB) and a home builder from Tulsa, Okla. "They also show just how important it was that Congress moved when it did to help spur housing demand by extending and expanding the home buyer tax credit beyond its November deadline. We hope to start seeing the intended effects of that move on buyer demand in early 2010 as families determine their purchasing plans following the holidays."
"While closings on existing homes got an expected push as the first-time buyer tax credit neared expiration at the end of November, contracts signed for new homes in November (which is what the government's data denotes) will close months after the deadline," explained NAHB Chief Economist David Crowe. "Meanwhile, effects of the newly expanded credit can be expected to take a couple of months to materialize, as we saw when the previous credit was enacted.
"As our builder surveys have indicated, the emerging housing recovery is on a bumpy path that is strewn with obstacles, including the extreme difficulties that builders are encountering in obtaining financing for new projects and inaccurate appraisals that are now scuttling a third of new-home sales. Today's report reinforces just how fragile the housing recovery remains and the potential damage that any further retardants could cause."
Sales of new single-family homes declined in three out of four regions in November, with only the Midwest posting a gain, of 21.4 percent. Declines of 3.3 percent, 21.1 percent, and 9.2 percent were recorded in the Northeast, South and West, respectively.
Meanwhile, the number of newly built homes on the market continued to decline in November, falling 2.1 percent to 235,000 units. This marked a 7.9-month supply at the current sales pace.