New-Home Sales Dropped 26.4% in '07

The sales of new homes plummeted 26.4% in 2007, including a 4.7% decline in the month of December, according to the latest government housing report. The U.S. Census Bureau reported that sales of new single-family homes fell from a seasonally adjusted annual rate of 634,000 in November to 604,000 in December. The November sales number was revised downward from 647,000. Fannie Mae economists say they expect new-home sales to drop another 10% in 2008. "We expect housing starts and sales to stabilize in the middle of the year, with sustained gains beginning in 2009," said Fannie's director of economics, Molly Boesel. New-home sales totaled 774,000 in 2007, down from 1.05 million the previous year.