U.S. new home sales fell in December, sales for year up
WASHINGTON (AP) - Sales of new U.S. homes cooled off in December compared with November but for the entire year were the best since 2009.
The Commerce Department said Friday that new-home sales fell 7.3 percent last month to a seasonally adjusted annual rate of 369,000. That's down from November's rate of 398,000, which was the fastest in 2 ½ years.
For the year, sales rose nearly 20 percent to 367,000. That's the most since 2009, although the increase is coming off the worst year for new-home sales since the government began keeping records in 1963. Sales are still below the 700,000 level that economists consider healthy.
The housing market began to recover last year, roughly five years after the housing bubble burst. Stable job gains and record-low mortgage rates encouraged more people to buy homes. Prices have been rising on a sustained basis. And builders started to increase construction of new homes, partly because the supply of homes had thinned to extremely low levels.
Jennifer Lee, a senior economist at BMO Capital Markets, said the December decline in sales of newly built homes wasn't cause for worry. She still expects sales to improve this year.
In a note to clients, she points out that figures for November, October and September were revised higher. And many buyers may have held off last month because of uncertainty over taxes. The White House and Congress reached a deal on Jan. 1 to keep income taxes from rising on most Americans.
"Take December's drop with a grain of salt, especially given all of the uncertainty about what will happen to taxes in the new year," Lee said. "And with new mortgage applications already picking in the first three weeks of January, we should see a better report next month."
For December, new-home sales fell 29 percent in the Northeast, 11 percent in the West and roughly 8 percent in the South. Only the Midwest showed strength, with sales rising 21.3 percent.
The median price for a new home rose in December to $248,900, up 1.3 percent from November and 13.8 percent from December 2011.
The supply of homes for sale also inched up to 151,000 - the most in a year. Fewer homes for sale have helped drive prices higher and made many markets more competitive. They have also encouraged more homebuilding.
The housing market has a long way back to a full recovery. But most economists expect the recovery will strengthen in 2013.
One reason is more people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.
Though new homes represent less than 20 percent of the housing sales market, they have an outside impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenues, according to data from the National Association of Homebuilders.
The gains in home building helped boost construction hiring in December by 30,000 jobs, the most in 15 months.
The Commerce Department said Friday that new-home sales fell 7.3 percent last month to a seasonally adjusted annual rate of 369,000. That's down from November's rate of 398,000, which was the fastest in 2 ½ years.
For the year, sales rose nearly 20 percent to 367,000. That's the most since 2009, although the increase is coming off the worst year for new-home sales since the government began keeping records in 1963. Sales are still below the 700,000 level that economists consider healthy.
The housing market began to recover last year, roughly five years after the housing bubble burst. Stable job gains and record-low mortgage rates encouraged more people to buy homes. Prices have been rising on a sustained basis. And builders started to increase construction of new homes, partly because the supply of homes had thinned to extremely low levels.
Jennifer Lee, a senior economist at BMO Capital Markets, said the December decline in sales of newly built homes wasn't cause for worry. She still expects sales to improve this year.
In a note to clients, she points out that figures for November, October and September were revised higher. And many buyers may have held off last month because of uncertainty over taxes. The White House and Congress reached a deal on Jan. 1 to keep income taxes from rising on most Americans.
"Take December's drop with a grain of salt, especially given all of the uncertainty about what will happen to taxes in the new year," Lee said. "And with new mortgage applications already picking in the first three weeks of January, we should see a better report next month."
For December, new-home sales fell 29 percent in the Northeast, 11 percent in the West and roughly 8 percent in the South. Only the Midwest showed strength, with sales rising 21.3 percent.
The median price for a new home rose in December to $248,900, up 1.3 percent from November and 13.8 percent from December 2011.
The supply of homes for sale also inched up to 151,000 - the most in a year. Fewer homes for sale have helped drive prices higher and made many markets more competitive. They have also encouraged more homebuilding.
The housing market has a long way back to a full recovery. But most economists expect the recovery will strengthen in 2013.
One reason is more people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.
Though new homes represent less than 20 percent of the housing sales market, they have an outside impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenues, according to data from the National Association of Homebuilders.
The gains in home building helped boost construction hiring in December by 30,000 jobs, the most in 15 months.
So, thatâs settles it, right? After all, existing inventory is down nearly 20% in the last 12 months, prices are up a full 7.4% year-over-year (according to CoreLogic), and residential investment is gradually improving. That means Jennifer Lee must be right, housing is finally rebounding. But arenât we missing something here? I mean, what if the rising prices and shrinking inventory are NOT the result of normal market forces, but massive government and Central Bank intervention? Does that change things at all? For example, what if there were signs that the market was being manipulated with historic low rates, easy mortgage modification programs, blanket gov underwriting and financing of mortgage loans, shadow inventory that is being deliberately withheld from the market to keep prices artificially high, and a $45 billion per month mortgage-backed securities bond buying program (QE 3, 4 or more) designed to incentivize banks to lend more money to loan applicants? Would that change your thoughts about whether the so called recovery was real or not? After all, the presumption is that houses are bought and sold in a free âmarketâ which Investopedia defines as: âA medium that allows buyers and sellers of a specific good or service to interact in order to facilitate an exchange. The price that individuals pay during the transaction may be determined by a number of factors, but price is often determined by the forces of supply and demand.â (Investopedia) So, how does this definition apply to our current US housing market? It doesnât apply at all, does it, because everything has been manipulated from top to bottom by the people who are supposed to be the systemâs impartial referees. âImpartialâ? Interest rates have been slashed in half from 6.5% in 2005 to 3.25% today. How impartial is that? Mr. Market didnât create that phony ârate stimulusâ. Mr Bernanke did! This is central planning at its worst. Capital is being diverted into sinking, unproductive industries, like housing, not because it helps the broader economy and puts people back to work, but because Bernankeâs criminal friends on Wall Street need another handout (and they're getting it). Isnât that whatâs really happening here Jennifer Lee?
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The people need representation to recapture our democracy that only the rich thieves now enjoy bought and paid for by lobbyists. 6 years in and still nothing but lies and manipulation for the decimated middle class or the new poor working class.