Trouble on the Home Front

Centex said order growth was good in Texas, Las Vegas, most of the Midwest (except Minneapolis) and areas of California (except San Diego and Sacramento).

Existing-Home Sales Slow

The National Association of Realtors reported Wednesday that total existing-home sales -- including single-family, townhomes, condominiums and co-ops -- dropped 5.7% to a seasonally adjusted annual rate of 6.6 million units in December from the revised pace of 7 million in November.

Sales were 3.1% lower than the 6.81 million-unit level in December 2004. Economists expected an annual rate of 6.89 million unit sales in December.

David Lereah, NAR's chief economist, said he expected the monthly sales decline.

"This is part of the market adjustment we've been discussing, with a soft landing in sight for the housing sector," he said in a statement. "The level of home sales activity is now at a sustainable level, and is likely to pick up a bit in the months ahead. Overall fundamentals remain solid, driven by population and employment growth as well as favorable affordability conditions in most of the country, so we expect the housing market to remain historically high but lower than last year's record."

Overall sales in 2005 set a fifth consecutive annual record, rising 4.2% to 7.072 million.

The national median existing-home price for all housing types was $211,000 in December, up 10.5% from December 2004, when the median was $191,000. For all of 2005, the median price rose 12.7% to $208,700 from a median of $185,200 in 2004.

Total housing inventory levels declined 4.4% as of the end of December to 2.8 million existing homes available for sale, which represents a 5.1-month supply at the current sales pace.