New home sales fall 9% in November

Sales of new one-family homes took a dive in November, falling to an annual rate of 647,000, according to the U.S. Census Bureau. That marks a 9% fall from October, making November the month of lowest sale levels in 12 years. Sales are down 34.4% from last year, as inventory supply continues to bloat at 9.3 months. Supply last year was at 6.5%. The slump is by no means over, which raises questions on how long this can continue before a recession sets in, according to Bernie Baumohl, managing director of The Economic Outlook Group LLC in Princeton Junction, N.J. Spring, which is historically a busy month for homebuyers, will be the test, he said. “The key question people are asking is whether we’ll see some kind of revival by spring 2008,” said Mr. Baumohl. “With mortgage rates still quite low and home prices falling quite a bit, we’re hoping all these factors will help revive buying. “Homeowners’ share of equity at this point is the lowest ever recorded, so there’s a lot riding on a housing rebound next spring,” Mr. Baumohl said. “We’re expecting the economy to come very close to a recession in 2008.”