USA Today
WASHINGTON (Reuters) — Sales of new homes rose 4.8% in December and prices climbed 1.2% as the number of homes on the market decreased, but for the year, the Commerce Department said 1.061 million new homes were sold, down 17.3% from 2005.
While Friday’s report showed some firming in the weakened housing sector in December. The year’s drop was the biggest in 16 years and the first annual decline after a five-year rally.
In December, sales of new single-family homes rose to a 1.120 million unit annual rate after climbing sharply the previous month. The department revised November ‘s sales pace up to a 1.069 million pace from an originally reported 1.047 million unit rate.
While those increases were better than expected, analysts cautioned that they were influenced by unusually warm weather in those two months.
The number of new homes on the market at the end of December fell to 537,000 from 542,000 a month earlier. At the current sales pace, that represented 5.9 months’ supply.
The median home price — half sold for more, half for less — rose to $235,000 in December from a downwardly revised $232,200 in November, the Commerce Department said.
New-home sales in December rose 27.3% in the Northeast, 26.6% in the Midwest and 0.3% in the South. In the West, sales fell 4.4%.
The Commerce Department’s latest take on the housing market adds to data released a day earlier that showed a 0.8% decline in December sales of existing homes, which represent 85% of the housing market.
According to that National Association of Realtors, existing home sales dropped 8.4% in 2006, sharpest decline since 1989, when they fell 14.8%.
