Rate of New Home Sales Down 14.7 Percent Since November

New single-family home sales ranked a seasonally-adjusted annual rate of 331,000 units in December, according to a joint report released Thursday by the U.S. Department of Housing and Urban Development with the U.S. Census Bureau. The rate came in 14.7 percent below the rate recorded in November. The average sales price of new homes sold in December was $246,900. The seasonally adjusted estimate of new homes for sale at the end of the month came in at 357,000, a 12.9-month supply at the current sales rate, according to HUD’s data. An estimated 482,000 new homes sold in all of 2008, a 37.8 percent decline from 2007’s 776,000 total. Approximately 23,000 new homes sold in December, with roughly a third — 30.4 percent — selling at a range of $150,000 to $199,999 and just over 26 percent selling at a range of $200,000 to $299,999. In November, 22.2 percent of new home sales fell in the $150,000 to $199,999 range, while 25.9 percent of sales fell in the $200,000 to $299,999 The data show a steady shift toward the less expensive ranges for new homes over the year. In December 2007, 2.7 percent of new home sales fell in the $750,000-plus range; in December 2008, less than 0.5 percent of sales occurred in that range. In December 2007, 13.6 percent of new home sales went for under $150,000; by December 2008, that ratio increased to 17.4 percent of all new home sales. In December 2007, about 52 percent of new home sales occurred in the $150,000 to $299,999 ranges. In December 2008, that ratio had increased slightly to approximately 56.4 percent of all new home sales, according to HUD’s data. The move into the lower price ranges may be gradual over the past year, but the shift is apparent in the data. The market has a long way to go to reach the bottom of the inventory; December 2008 showed a 12.9-month inventory (based on the current rate) while December 2007 showed only 9.8 months’ inventory. A look at the raw data for home inventory tells a slightly different story, however; while approximately 494,000 new homes were still for sale at the end of December 2007, some 357,000 were for sale at the end of December 2008. So, while the rate of sales may have declined — 44.8 percent, according to the data — the market is slowly selling off excess inventory. Read the report. Write to Diana Golobay at diana.golobay@housingwire.com.

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