New-Home Sales Crumble

Sales of new homes reached a nearly 13-year low in December, falling 4.7% from November and almost 41% from the year-ago period.

The Census Bureau said Monday that sales of new single-family homes in December were at a seasonally adjusted annual rate of 604,000 units, compared with a downwardly revised 634,000 in November. In December 2006, home sales were at a rate of 1.02 million units.

The December data were well worse than economists' expectation for a selling rate of 645,000 homes, based on data from Reuters. The figures marked the lowest sales pace since February 1995.

Prices also slid, with the median home price reaching $219,200 in December. In November, the median price of a new house was $239,100.

Housing Gloom Opens Door for Bigger Rate Cut

The seasonally adjusted estimate of new houses for sale at the end of the month was 495,000 homes, representing 9.6 months of supply at the current sales pace. That marks the highest level of months' supply in all of 2007.

For all of 2007, an estimated 774,000 homes were sold, a 26.4% drop from the 1.05 million new homes sold in 2006.

Homebuilder stocks -- which saw big gains last week after the Federal Reserve cut interest rates -- were sliding on the report. Lennar (LEN) was down 59 cents, or 3.5%, to $16.39; D.R. Horton (DHI) dropped 62 cents, or 4%, to $14.81; and KB Home (KBH) fell $1.33, or 5.6%, to $22.32.

Toll Brothers (TOL) was sliding $1.14, or 5.3%, to $20.32, and Centex (CTX) lost 89 cents, or 3.4%, to $25.49.

>To order reprints of this article, click here: Reprints