New home sales fell 7.3% in December after hitting a two-and-a-half-year high in November, according to the latest government report on the housing market.
The Census Bureau reported Friday morning that sales of newly constructed homes fell to a 369,000 seasonally adjusted annual rate in December from a 398,000 rate in November.
December sales were disappointing. But the Bureau revised November sales upward by 21,000 units. Last month’s estimate of November sales was a 377,000 rate.
For the full year, Census Bureau economists estimate new home sales totaled 367,000 units in 2012, up 20% from 2011.
Despite this increase, the supply of new homes on the market remains tight. There were only 151,000 new homes for sale at yearend, compared to 152,000 in December 2011.
Economists at the National Association of Home Builders expect single-family starts will rise 22% from 535,000 last year to 650,000 in 2013—with an additional 30% jump in 2014 to 844,000 units.
“Nearly every measure of housing market strength—sales, starts, prices, permits and builder confidence—has been trending upward in recent months and we expect to see gradual but steady growth along these lines in 2013,” said NAHB chief economist David Crowe.