New-home sales dip after 4 straight monthly gains

By Qiong (June) Zhang34 Comments

http://seattletimes.nwsource.com/html/businesstechnology/2017586174_apusnewhomesales.html

Sales of new homes dipped in January but the final quarter of 2011 was stronger than first estimated.

The Commerce Department said Friday that new-home sales fell 0.9 percent last month to a seasonally adjusted annual rate of 321,000 homes. That followed four straight months of gains in which home sales rose 10 percent.

Even with more sales, just 304,000 new homes were sold in 2011 – the fewest on records dating back to 1963. And new homes are selling well below the 700,000-per-year rate that economists equate with healthy markets.

Sales prices for new homes are rising. The median sales price of a new home rose 0.3 percent in January to $217,100.

In January, sales of previously occupied homes reached their highest level in nearly two years. And they have risen more than 13 percent in the past six months. Mortgage rates have never been lower.

Economists caution that housing is a long way from fully recovering. Builders have stopped working on many projects because it’s been hard for them to get financing or to compete with cheaper resale homes. For many Americans, buying a home remains too big a risk more than four years after the housing bubble burst.

Builders ended 2011 with a third straight year of dismal home construction and the worst on record for single-family home building. But in a hopeful sign, single-family home construction, which makes up 70 percent of the market, increased in each of the last three months.

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