Purchases of new U.S. homes unexpectedly dropped in December, indicating the U.S. housing rebound will take time to develop after the industry completed its first year of recovery.
Sales declined 7.3 percent to a 369,000 annual pace following a 398,000 rate in November that was higher than previously estimated and the strongest in more than two years, Commerce Department figures showed today in Washington. The median estimate of 77 economists surveyed by Bloomberg called for sales to reach 385,000 last month.
Even with December’s slip, 367,000 new homes were purchased for all of 2012, the most since 2009 and the first annual gain in seven years, showing the housing market is on the road to recovery. A dearth of previously-owned properties in the U.S., mortgage rates near record lows, healthier job prospects and a rising number of households should stoke demand for newly- constructed homes this year.
“2012 was the first year we’ve seen a sustained recovery in housing,” Celia Chen, a housing economist at Moody’s Analytics in West Chester, Pennsylvania, said before the report. “This year will be even better. On the supply side, inventories are pretty tight. On the demand side, things are definitely improving, and that’s because job growth is in place.”
Economists’ estimates ranged from a sales rate of 340,000 to 406,000. November was previously reported as showing sales of 377,000 at an annual rate.
For all of 2012, new home sales increased 19.9 percent, the biggest jump since 1983 and the first gain since 2005.
The median price of a new home increased 13.9 percent last month from a year ago, climbing to $248,900.
In December, purchases decreased in three of four regions, led by a 29.4 percent slump in the Northeast. Sales also fell 11.1 percent in the West and 8.4 percent in the South. They rose 21.3 percent in the Midwest.
The housing data for last year show the market gained vitality in 2012. Construction of new properties rose last month to a 954,000 annual rate, the fastest pace since June 2008, according to Jan. 17 Commerce Department figures. The December print capped the best year for homebuilding since 2008.
Today’s report showed the supply of new homes at the current sales rate climbed to 4.9 months from 4.5 months in November. There were 151,000 new houses on the market at the end of December, up from 149,000 the prior month.
There were 1.82 million previously-owned homes on the market in December, the fewest since January 2001, according to National Association of Realtors data earlier this week.