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.

[inbredwhty]

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

[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

[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 !!!!!

[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]

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 !!

[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 !!

[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.

[buddhabman]

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

[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.

[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.