New Home Sales Plunged In November

9 Percent Drop Was Worst Showing Since April 1995, Commerce Department Reports

(AP)  Sales of new homes plunged last month to their lowest level in more than 12 years, a grim testament to the problems plaguing the housing sector.

The Commerce Department reported Friday that new-home sales tumbled by 9 percent in November from October to a seasonally adjusted annual rate of 647,000. That was the worst showing since April 1995, when the pace of sales was 621,000.

The sales pace for November was much weaker than economists were expecting. They were predicting sales in the weakest sector of the economy to drop by around 1.8 percent, to a pace of 715,000.

The median sales price of a new home dipped to $239,100 in November. That is 0.4 percent lower than a year ago. The median price is where half sell for more and half for less.

By region, sales fell in all parts of the country, except for the West, where they rose.

New-home sales dropped by 19.3 percent in the Northeast. They plunged by 27.6 percent in the Midwest and they fell by 6.4 percent in the South. However, sales increased by 4 percent in the West.

Over the last 12 months, new-home sales nationwide have tumbled by 34.4 percent, the biggest annual slide since early 1991, and stark evidence of the painful collapse in the once high-flying housing market.

That market has been suffering through a severe slump following five years of record-breaking activity from 2001 through 2005. Sales turned weak as did home prices. The boom-to-bust situation has increased dangers to the economy as a whole and has been especially hard on some homeowners.

Foreclosures have soared to record highs and probably will keep rising. A drop in home prices left some people stuck with balances on their home mortgages that eclipsed the worth of their home. Other home buyers were clobbered as low introductory rates on their mortgages jumped to much higher rates, which they couldn't afford.

With credit now harder to get to finance a home purchase, the problems in housing have grown worse. Unsold homes have piled up. The problems are expected to persist well into next year.

The housing and mortgage meltdowns have raised the odds that the country will fall into a recession. And, it has given Democrats and Republicans politicians- including those who want to be the next president - plenty of opportunities to spread blame around.

To help bolster the economy, the Federal Reserve has sliced a key interest rate three times this year. Its latest rate cut, on Dec. 11, dropped the Fed's key rate to 4.25 percent, a two-year low. Many economists are predicting the Fed will lower rates again when they meet in late January.

The economy's growth is expected to have slowed to a pace of just 1.5 percent or less in the October-to-December. Analysts believe that the housing and credit troubles will force consumers and businesses to tighten the belts, causing the economy to lose considerable speed. The housing slump has been a drag on overall economic activity, lopping more than a full percentage point off growth during the summer alone.

[joyous88]

Thank you president bush and your neo conservative
jesusfascists backers!

[drivelphobe]

The economists didn''t expect this? Then they sure aren''t very bright, just imbeciles. Housing prices are at least double what they should be in relation to legitimate demand. People have to be able to afford them. What a crock. I hope everyone involved in this fiasco, house of cards scam, goes financially down the drain.

[DaveGress]

Wasn''t Bush the guy that gave money away when he was first elected? I''ll bet he wishes he''d thought about that a little more. Oh, I forgot, that was when he was playing golf a lot and ignoring memos that were titled "Bin Laden determined to stike inside the United States".

[DaveGress]

The ecomimist''s forgot about the dubya factor. Prices dubya when Bush took over, since he''s leaving office soon prices will be cut in half.

[omega39-2009]

The economists didn''''t expect this? Then they sure aren''''t very bright, just imbeciles.
Posted by drivelphobe

The economists are likely looking at data that has been heavily massaged. They and the press are just starting to look at neighborhoods that are starting to resemble ghost towns. You''re right on about the housing correction though, prices have a long way to fall (especially with tighter loan qualifications), before Joe Public''s salary can support the outrageous payments these inflated housing prices require.

[lochlan-2009]

"The economists didn''t expect this?"

Of course they new what was coming (interest only and 50 year mortgages), they planned on it. The main stream media can''t just come out and say that the bankers had a plan to $crew the middle and lower middle class out of their life saving. Not unless they are told they can by Murdoch and friends, for an alternative agenda.

[fornicario]

"Economy is doing well". I never want to hear those words come out of Shrub''s mouth EVER AGAIN. His lies are finally coming undone, and only the lower and middle class will pay for the blunders of the ultra-rich.

[mcleanva07]

I was amazed to see nobody say a thing when house prices tripled around here. Sure, when gas prices go up, you''ll be paying a few dozens or a few hundred dollars more each month. Yet, when house prices triple, you pay hundreds or even thousands of dollars more each month. And besides your mortgage, you pay more in property taxes, too. And you don''t have money for anything else. And in the case when you can not afford a house, your rent doubles, too. It''s like you are paying for one apartment at the price of two.
Nonetheless, people felt glad instead because they kept thinking: "Wow, I''ve bought this house now. In a year, I''ll make a few hundred thousand dollars easily thanks to price increase". People are really fooled by this. The thing is those few hundred thousand dollars don''t exist. You are not selling your house yet. You are still living in that house and paying a lot more in property taxes when house prices go up. Plus, the house does not belong to you yet. It belongs to the bank. And if you sell that house, then you''ll have to buy another house. And you''ll have to pay an arm and a leg for it because of the new price increase. The only way you can make money is to sell your house and move to another area or state where house prices are lower. But who would move when they don''t have to or want to?

[mcleanva07]

Recently, I%u2019ve heard on the radio that the national average income is around $29,000/year. Yet the average house price has been $250,000 to $300,000. And especially around the Washington, D.C. metro area, it has been around $400,000 - $500,000. What%u2019s wrong with the picture?
We, the middle class, have been hit really hard by this crazy housing market. And this has happened in the whole country, not just around the Washington, D.C. metro area (just different levels of severity). Paying double or triple for your rent or mortgage means a lot less money left in your wallet, a lot less disposable income. And a lot less disposable income means we are a lot poorer. A basic house or apartment providing a roof above your head should be a basic need, not a luxury. You should not have to pay an arm and a leg for it.
And now, of course, the gas price increases have added insult to the injury. We are now having even a lot less disposable income.

[mcleanva07]

During the housing boom, I recall hearing that the economy was doing very well. And that the vast majority of Americans could now afford their American dream of owning a home.

How ironic! Could they really afford that or were they paying interest only or ARM loans?

[hypnotoad72]

Tell me a strong story on how it''s all a big plan, and I might be able to answer it with something that puts the tinfoil theory to pieces.

[smiley676]

It is the economy. It is cyclical. Housing prices are too high now, they will come down, people will start buying again. Up and down up and down, that is what the economy does.

[gkc99]

"The sales pace for November was much weaker than economists were expecting. "

When the Savings and Loans all went belly up and the taxpayer had to pay billions to bail out billionaires: the economists didn''t expect it.

When housing prices were run through the roof, beyond affordability, by "investors" and "flippers" with Hong Kong bank accounts: the economists didn''t expect it.

When the Darth Bushit adminstration turned a federal budget surplus into the biggest add-on to the National Debt in history: the economists didn''t expect it.

So why does anyone listen to what economists DO expect? Search me!

[omega39-2009]

It is the economy. It is cyclical. Housing prices are too high now, they will come down, people will start buying again. Up and down up and down, that is what the economy does.

Posted by smiley676

I believe that used to hold true, the global economy and it''s ever increasing downward pressure on wages is the new uncertainty. The cyclical aspect may very well be that once housing prices reach parity and the public can afford them, the rich will again jump on the speculation bandwagon.

[mcvet]

Not to worry folks, "Trickle Down" will reach you someday.... The fact that it never has doesn''t matter. Oh and that Tax Increase caused by the Debt, not to worry, we''ll take it our of some other program. Sieg Heil Bush!

[rohink-2009]

That was the worst showing since April 1995, when the pace of sales was 621,000.

~~~~~~
~~~~~~~~~
Obviously the market rebounded, as it will again.

[mcleanva07]

"It is the economy. It is cyclical. Housing prices are too high now, they will come down, people will start buying again. Up and down up and down, that is what the economy does."
"Obviously the market rebounded, as it will again."

Sure. The economy is cyclical and it will rebound again. It''s just that the middle class is getting a lot poorer. Recently, I%u2019ve heard on the radio that the national average income is around $29,000/year. Yet the average house price has been $250,000 to $300,000. And especially around the Washington, D.C. metro area, it has been around $400,000 - $500,000. What%u2019s wrong with the picture?

Look and see how many people having to keep overstretching to pay for their mortgages or lose their homes because they cannot afford to pay anymore.

[iphyt4u]

during the 50''s when it took only one bread winner to pay for the house, the car, the insurance, and all the utilities...what happened to that cycle. it''s not cyclical, the $800 billion stolen by your government to pay for an alleged war is not cyclical. energy costs taking %40 of ones pay check is not cyclical. when we''re standing in a soup line, i hope you cyclical types are behind me. i could use some sunshine up my colon.

[gkc99]

The legacy of the Darth Bushit regime''s economic policies are coming home to roost. You can''t fund much of a housing market with purchases by billionaires, no matter how big a mansion they get. As Bushit, or rather Bushit''s puppet masters, have seized more and more of the nation''s wealth for a small minority, only smoke and mirror mortgages could keep the escalating housing prices within even the illusion of affordability. As usual when such tricks are played, the whole house of cards eventually collapses.

Thanks, Bushits!

[rohink-2009]

Some of you posters are truly pathetic. Absolutely out of touch with reality.

[feelfree1]

Re: "New Home Sales Plunged In November"

Let''s not get too worked up about this just yet. The housing market collapse will undoubtedly be far more severe by this time, next year.

[aggiekat2004]

From someone in the construction business...the price of materials have also risen greatly. From the time you break ground on a house until the time it''s done, the cost of electrical wiring and copper tubing might triple.

But you know...didn''t our parents teach us that you "don''t get something for nothing?" How can someone expect to buy a $500,000 house with $1,500 payments...simple finance tells us that something''s just not right with this picture!

[blancadebree]

Once again we see how the liberal media uses liberal facts to show how "bad" the economy is. Anyone can twist the facts to make the economy look bad, just like anyone can twist the facts to make the economy look good.

http://blancadebree.blogspot.com

[trillion1]

Yes, *** that liberal media making me think I don''t have as much in my wallet. LOL. Media has nothing to do with how people feel today about the economy. We can still pay our bills and won''t go hungry but we don''t have the extra money we had in the 90s. And the raises we''ve gotten don''t mean as much when they don''t match the rising cost of living.

[usayesterday]

All the former dot-com professionals who were thrown out on their A$$ back in 2000 and 2001... most decided to become real-estate agents or mortgage brokers.

Now those same folks are back out on their A$$ again!

Two big economic lessons in the past decade were given to the American people in a very harsh way... which was:

A huge economic boom can be considered as a "bubble" and with any bubble, it will eventually burst. So it is best NOT to over invest into that bubble! Always diversify your investments.

Now the question is... how many Americans (over the past 10 years) paid attention?

[whitecat151]

I''m kinda glad this has happened.

The idiots who bought a $95,000 house for $175,000 and somewhat obscured (future) interest rate changes...

Then there are the other idiots who thought that the $250,000 house with two bedrooms and three baths was a bargain... even though they worked part time at Wendy''s...

And most of all the greedy sonzabitdges that sucker''d all these kind of folks into the deal...

Yeah.... this whole housing thing was expected.

Why is it that folks Do Not Pay Attention To The Details ?

Idiots.... all of ''em


WC

[whitecat151]

I''m kinda glad this has happened.

The idiots who bought a $95,000 house for $175,000 and with a somewhat obscured (future) interest rate changes... and wonder why they can''t sell it for a half million today.

Then there are the other idiots who thought that the $250,000 house with two bedrooms and three baths was a bargain... even though they worked part time at Wendy''s.

And most of all the greedy sonzabitdges that sucker''d all these kind of folks into the deal...

Yeah.... this whole housing failure thing was expected, at least by yours truly.

Why is it that folks Do Not Pay Attention To The Details ?

Idiots.... all of ''em... they got what they deserve.

So mote it be.

WC

[whitecat151]

apologies for the double post....

WC

[glaswolf]

Trauma induced among the illegals due to antiIndians seeking what they thought were 10 million jobs and 1 million businesses owned by "illegal mexicans" forgot to factor in that 60% of the illegals were nonIndians, who are not so casual as Indians when reflecting on threats of deportation. Indians to TJ is not deportation to war ravaged nations where hundreds of thousands have been slaughtered and millions raped ... think about it, even if 60 years ago, as we are at war now. Basicly, greed among the antiIndians was like poking the goose that laid the golden egg in the eye. Judeo christian rightists caused the downslide avalanche... now they''re in a gravity fall with their supporters ... why should we, The Indians, help them again? Let them fall like their historical kind, into oblivion''s misery of self deception and intellectual disintegration. Have fun folks, as we are at war.

[usayesterday]

"glaswolf" = "snidegrass" of the past?

Nearly the same, if not identical writing and thought pattern.

Hmmm.

Its that, or there are far more abstractionists on the CBSnews.com site than I thought.

[jowand]

Existing home sales are of 5 percent and new home sales are off 20 percent, compared to a year ago. Too many, stupid builders and greedy banks, building on the come and not paying attention to the economic reports.

http://www.realtor.org/Research.nsf/files/EHSreport.pdf/$FILE/EHSreport.pdf

[usayesterday]

Posted by jowand at 05:49 AM : Dec 29, 2007
...............

You brought up a segment of the housing crisis that many seem to forget... the builders.

The big national home builders, most with offices on the East Coast, over built in many areas, especially the West. The Las Vegas market began to fall prior to the bubble bursting, primarily due to a glut of housing inventory. And housing inventory, in the end, is what will keep the market down overall. That applies to the very basic concept of economics: "supply versus demand".

But there are so many entities who are responsible for the housing/mortgage crisis, and they are the following:

Unscrupulous and greedy...

- builders
- lenders/banks
- buyers
- investors
- Realtors

All of those groups have a hand in this housing/mortgage crisis, but it is the home owners/buyers and Realtors who will suffer the most during this crisis.

Sadly, all of America will suffer from this crisis as many economic experts predict that it will cause a recession for 2008 and possibly 2009. Even those who were responsible buyers/home owners will suffer in a recession!

[standlee5]

Congress was asleep at the wheel totally dropped the ball and let the banks run wild and crazy completely deregulated. It''s insane and we''re left to bail out he mess while those responsible made billions. Next they''ll decide the only way to pull us out of this recession is to open the flood gates and let another 30 million new people into the country to sustain "growth". This is crazy economics and will eventually lead us to entire financial meltdown.

[mcv57]

cbs0724,
Trying to add insult to injury.

No thanks, I hope you and your real estate buddies end up on the unemployment line. You real estate brokers and agents are nothing more than used car saleman with a different suit jacket - Rip off man.

[shanev137]

Blood will be running in the streets shortly, now that banks won''t lend money to buy houses anymore.

A few more years of 30 to 40% price drops should create the buying opportunity of a lifetime.

[buddhabman]

Good websites about Housing Bubble. www.thehousingbubbleblog.com or www.housebubble.com

[tokaotic]

know when to hold em and know when to fold em. Greed
will keep buyers in the game for a few months more then we will see a new wave of defalts and bargen prices. You CAN lose money on real estate. Time to buy will be next summer after the spring sales of existing homes fizzels.

[jetranger7]

Yip, the "MELT-DOWN" is here everybody, and will continue clear into 2008-2009 and probably Beyond. The Trucking Sectors are really hurting, and have been for the last 12 to 18 months, many are closing their doors and laying off their employees, the Rail Roads are hurting as well as shipments have Slowed way down, and will Continue now that housing and other areas are in a crisis, so their movement of Freight will Continue to slow way down. The One thing I don''t see being Reported on any of the News Sites is, the amount of Job Lay-offs and businesses who have shut down and laid people off, and the amount of OUTSOURCING and How much Manufacturing has Moved Overseas to Foreign Countries, Also the White House Adminstration along with their Ignorant Labor Dept, are continuing to act as tho everything is Just Peachy and Roses in the Economy, and continue to spew False Rhetotric that jobs were created, which many are nothing more than Part-Time Low Wage NO-Benefit Jobs, that you couldn''t Support yourself on Living out of a Trash Dumpster even ! Its time to tell the Truth ! Reporters should be climbing all over how many Decent paying jobs we''ve lost in this country in the last 8 to 10 Years, its Pathetic and Ridlicious !!

[jetranger7]

Read the post right below this - Its Not Just Blue Collar Jobs being lost either, many White Collar Jobs have been trashed in the Corporate Sector , all this has got to come to a complete STOP, if this country want to survive and continue to be able to live and go on as we have been the last 50 years, other wise were heading ourselves into a 3rd world status for generations to come !! NO-MORE OUTSOURCING, NO MORE FOREIGN IMPORTS - AND DEFINETLY NO-MORE CHEAP ILLEGAL FOREIGN LABOR - ENOUGH !!

[standlee5]

Reporters should be climbing all over how many Decent paying jobs we''''ve lost in this country in the last 8 to 10 Years, its Pathetic and Ridlicious !! Posted by JetRanger7 at 12:51 AM : Dec 31, 2007


The real jobs left and the jobless became mortgage brokers, scammers, payday lenders, bill collectors. It''s sad and pathetic for sure.

[jetranger7]

This isn''t all either, the Sales of Big Class 8 Semi Trucks is way down also, because the trucking industry is falling on hard times also, with high fuel prices and other operating expenses. Then you can also bet that heavy equipment dealers, those who sell the Big Cat Dozers and other Earth moving Equipment their sales are going to be dismal thru out 2008-2009 too, along with new cars, and everything else ! Of course if we keep OUTSOURCING American Jobs to INDIA & CHINA, and they keep moving manufacturing plants to MEXICO & CHINA, soon we''ll all be out of work permanetly and even the discount stores will have to close because nobody will have any money to buy their products, because they outsourced everyones jobs !!! Will somebody wake the morons up in Washington before its too late !!!!!

[jetranger7]

ANYBODY want to Complain to their State Senators, by Calling them or writing them and giving them an Easr full, and get them up off their butts and do something before we all find ourselves jobless & homeless,, the web site is : WWW.SENATE.GOV call them, let them know you''ve had enough of jobs going overseas, and jobs being outsourced and giving those companies huge tax breaks to do it, and for not imposing stiffer tariffs on the goods that are being shipped over here which is usually CHINAs JUNK !!! WWW.SENATE.GOV

[inbredwhty]

Its been fun watching this country imploding and going the way of the Roman Empire...film at 11.