U.S. new home sales unexpectedly fall in December

WASHINGTON, Jan 27 (BestGrowthStock) – Sales of newly built U.S.
single-family homes fell unexpectedly in December, data showed
on Wednesday, the latest indication that the government-led
housing recovery might be losing some steam.

The Commerce Department said sales fell 7.6 percent to a
342,000 unit annual rate from an upwardly revised 370,000 units
in November. It was the second straight month that new home
sales declined.

Analysts polled by Reuters had expected new home sales to
increase to a 370,000 unit annual pace from November’s
previously reported 355,000 units.

New home sales for the whole of 2009 fell 22.9 percent to a
record low 374,000 units, the department said.

The housing market recovery is showing some signs of
fatigue after a surge in sales as first-time buyers rushed to
take advantage of a popular tax credit, which had been
scheduled to expire in November.

It has since been expanded and extended until June this
year and while analysts expect home sales to pick up as a
result, they reckon the pace will not be as strong as witnessed
with the initial tax credit.

The housing market was the main catalyst of the most
painful downturn in 70 years and renewed weakness could hobble
the economic recovery.

Despite the slump in sales there were a few bright spots in
Wednesday’s report. The median sale price for a new home rose
5.2 percent last month from November to $221,300, the highest
in seven months and the biggest rise since April 2009. Compared
to December 2008, the median sale price fell 3.6 percent.

The number of new homes on the market last month dropped
1.7 percent to 231,000 units, the lowest level since April
1971. However, December’s weak sales pace left the supply of
homes available for sale at 8.1 months’ worth, the highest
since June 2009, from 7.6 months in November.

Investing Analysis

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

U.S. new home sales unexpectedly fall in December