New home sales in the U.S. fell much more than expected in December to their slowest pace on record, the Commerce Department reported Tuesday. Meanwhile, the median sale price fell to $206,500.
New home sales fell to an annualized pace of 331k, a 14.7% decline from November, the report said. The previous month's reading of 407k sales was revised down to 388k.
Economists were expecting a 2.5% fall to 4397k. Inventories rose to a pace of 12.9 months, up from an 11.5-month supply in November.
The median sale price of new houses fell to $206,500, down from $220,400 in November. Annually, prices have fallen 9.3%.
Sales fell across all regions. In the West, the pace of sales fell to 71k in December from 89k in November, while sales in the Midwest fell to 51k from 54k. Sales in the South moved down to 181k from 210k in November. The pace of sales fell in the Northeast to 28k from 39k in November.
Prior to the release, Mike Englund, chief U.S. economist from Action Economics, said it's still too early for markets to be looking for a bottom in housing sales.
"Given the recent heightened downturn in the various housing indicators over the past two months¥bounces only reversed the recent outsized declines in October and November," he said. "Falling rates should have a beneficial effect as we approach the Spring housing season, and the period just prior to this, such as January or February, would be a more likely timing for a bottom than December."
By Stephen Huebl and edited by Sarah Sussman
©CEP News Ltd. 2009