New Home Sales End Year on Disappointing Note
New home sales fell in December for the second consecutive month, but total sales for the year were still 16% higher from a year ago.
The government reported Monday morning that sales of new single-family homes fell 7% in December following a 4% decline in the prior month.
The December report was worse than expected and it includes sharp downward revisions to sales in the previous two months.
The Census Bureau said new home sales fell to a 414,000 seasonally adjusted annual rate in December from a 445,000 rate in November. Sales in November and October were revised downward by a combined 30,000 units.
Analysts were expecting new homes sales would be flat in December due to seasonal factors and severe weather.
Economists at JPMorgan Chase Bank cautioned that “recent figures reported on homebuilder sentiment and mortgage purchased applications have weakened to some degree.”
Back in October, it appeared new home sales would be up 20% or more for the full year. Housing experts are forecasting that builders could see another 20% to 40% increase in 2014. The latest Census Bureau report may dampen some of that optimism.
Overall, new home sales totaled 428,000 in 2013, up from 368,000 in the year prior.