New Home Sales Fall to Early 1991 Lows

New homes sold at an annualized pace of 407,000 units in November, the weakest showing in almost 18 years and further evidence that the housing market is still in distress. According to figures compiled by the Commerce Department and the Department of Housing and Urban Development, new home sales fell 2.9% compared to October, and 11.4% from the same month last year. "The November figure of 407,000 is the lowest since January 1991 and within a whisker of the lowest since 1982," said Greenwich Capital analyst Steve Stanley. "Builders are having increasing difficulty competing on price against the wave of foreclosed homes hitting the market, and the drastic tightening in credit is hitting developers on both sides (households are having more trouble qualifying for mortgages and the builders are having their own funding issues)." The median sales price rose to $220,400 from $214,600 in October.