New home sales fell -4.7% MoM, to a 12 year low, in December. In addition, November's drop was revised even deeper from an originally reported -9% to -12.6% MoM. The decline in new home sales in 2007 (-26%) was the largest annual decline ever recorded (going back to 1963).
New home median prices fell -10% YoY, the largest annual decline in 37 years of record keeping. The median new home price in December 2006 was $244,700, and it fell to $219,200 last month. The inventory of available new homes for sale rose to the highest level since 1981, at 9.6 months of supply.
The Northeast was the only region to see an increase in new home sales in December at +6% MoM. This was more than offset by the 6.5% MoM decline in sales in the South, which is seven times larger than the Northeast as far as monthly new home sales are concerned. The Midwest and West (-6% MoM) saw smaller regional declines in new home sales in December.
Clearly, residential construction remained a drag on the economy at the end of 2007, and most experts aren't expecting it to turn around quickly.
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