Login  /  Register  | 3 premium articles left before you must register.

2012 a strong year for builders: New home sales rise 20 percent

By MARTIN CRUTSINGER AP Economics Writer

Publication: The Day

Published January 26. 2013 4:00AM

Washington - Sales of new U.S. homes cooled off in December compared with November but for the entire year were the best since 2009.

The Commerce Department said Friday that new-home sales fell 7.3 percent last month to a seasonally adjusted annual rate of 369,000. That's down from November's rate of 398,000, which was the fastest in 2 years.

For the year, sales rose nearly 20 percent to 367,000. That's the most since 2009, although the increase is coming off the worst year for new-home sales since the government began keeping records in 1963. Sales are still below the 700,000 level that economists consider healthy.

The housing market began to recovery last year, roughly five years after the housing bubble burst. Stable job gains and record-low mortgage rates encouraged more people to buy homes. Prices have been rising on a sustained basis. And builders started to increase construction of new homes, partly because the supply of homes had thinned to extremely low levels.

Jennifer Lee, a senior economist at BMO Capital Markets, said the December decline in sales of newly built homes wasn't cause for worry. She still expects sales to improve this year.

In a note to clients, she points out that figures for November, October and September were revised higher. And many buyers may have held off last month because of uncertainty over taxes. The White House and Congress reached a deal on Jan. 1 to keep income taxes from rising on most Americans.

"Take December's drop with a grain of salt, especially given all of the uncertainty about what will happen to taxes in the new year," Lee said. "And with new mortgage applications already picking (up) in the first three weeks of January, we should see a better report next month."

Town News

Visit Zip06
Submit Your:  Submit Your News Submit Your Photos Submit Your Events
Most Recent Poll
What do you think about Defense Secretary Panetta lifting a ban on women in combat?
Women in the military have been injured and killed longside men for years. They deserve the opportunities combat roles bring.
46%
I'm against it. Putting women on the front lines will hurt the male bonding that is crucial to a fighting force.
24%
What's the big deal? Other countries allow women in combat. We are behind the curve on this.
23%
Didn't Demi Moore already break down this barrier in G.I. Jane?
8%
Number of votes: 918

No current items found