New-home sales fall to 12-year low

December sales of new homes fell to their lowest level in 12 years and home prices also took a dive. Sales of single-family homes fell 4.7% last month to a seasonally adjusted rate of 604,000, marking the lowest rate since 560,000 in February 1995, according to a report from the Department of Commerce. November new-home sales fell 13% to an annual rate of 634,000, revised down from a previously estimated figure of 647,000. For 2007, new-home sales fell by a record 26.4% to 774,000, marking the worst decline in sales record, surpassing the old mark of a 23.1% plunge in 1980. The median price for a new home fell by a record 10.9% in December to $219,200 compared with an average price of $245,900 in November and was down 10.4% compared to the year ago. For the year, the median price of new homes inched up 0.2%, to $246,900. Despite the falling prices, inventories of homes fell. Fully, there were 495,000 homes on the market at the end of the month, marking a 1.4% decline from the 502,000 homes on the market in November. On a regional basis, December new-home sales fell 6.5% in the South, 1.2% in the Midwest and 6% in the West. But sales in the Northeast rose 6%.