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Good news for new home sales in the West/Bad news for all others

By
Real Estate Agent with RE/MAX Hometown

 

New home sales in November have a bad showing in all regions of the country except the rise in the West.

Sales dropped 19.3% in the Northeast, 27.6% in the hardest hit Midwest, and 6.4% in the South.  The only region to rise was the West, which gained 4% in November. 

The median price of a new home was $239,100, up slightly from October but down 9% from a peak of $262,600 in March. The reason for the rise in October was the relative strength of sales in the West, which includes California, the nation's priciest state.

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

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

To help the economy, the Federal Reserve has lowered a key interest rate three times this year. Its latest rate cut, on Dec. 11, which lowered 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.