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WASHINGTON: Sales of new US homes slid 11.3 percent in November to their lowest level since April, according to government data on Wednesday, highlighting volatility in the fragile housing market.
The Commerce Department said sales plunged to a seasonally-adjusted annual pace of 355,000 from a downwardly revised 400,000 in October.
The figure was far below analyst expectations for a pace of 440,000 new home sales, but some said the figure may have been skewed by a tax credit for some buyers that was due to expire in November.
The report dampened optimism about a rebound in the critical housing sector, which had risen after data on Tuesday showing a 7.4 percent rise in the larger market for existing home sales.
The latest report also showed an ongoing glut of unsold homes and a mixed picture for prices.
The inventory of new homes fell slightly to 235,000 from 240,000 a month earlier. But because of a slower sales pace, this represented a rise to 7.9 months in the stock of unsold homes, from 7.2 percent.
The median price rose 8,000 dollars from October to 217,400 dollars and the average price increased 18 percent to 280,300. But on a year-over-year basis, median prices were down around two percent and average prices off three percent.
Michael Zoller at Moody's Economy.com said the surprisingly weak report negates several months of gains. But he said the figures may have been skewed by a government tax credit set to expire in November before Congress extended and expanded it.
"Those who were considering contracting a new home in November would have been unable to meet the November 30 deadline in order to claim the tax credit," he said.
"Though the tax credit was extended and expanded, November buyers had no way of knowing in advance that their sales would qualify. This month may therefore be an anomaly, and an increase in new home sales in December would not be shocking."
Although new home sales represents a smaller segment of the real estate market than existing homes, the pace of sales and inventories affects construction, which is significant for economic activity.
Ian Shepherdson at High Frequency Economics said Wednesday's report "tells us nothing at all about the future."
"We expect sales to rise sharply next year, not the least because eligibility for the tax credit has been broadened to include most home buyers, not just first-time buyers," he said.
"Homes are now very affordable... and inventory is well down from its peak." - AFP/de
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