New-Home Purchases Fall, 2011 Worst Ever for Sales

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New-home purchases fall, 2011 worst ever for salesWASHINGTON (AP) - Fewer people bought new homes in December, making 2011 the worst sales year on record.

The Commerce Department said Thursday new-home sales fell last month to a seasonally adjusted annual pace of 307,000. The pace is less than half the 700,000 that economists say must be sold in a healthy economy.

About 302,000 homes were sold last year. That's less than the 323,000 sold in 2010, making 2011 the worst year on records dating back to 1963.

The median sales prices for new homes dropped in December, as builders continued to slash prices. It fell 2.5 percent to $210,300.

Still, sales of new homes rose in the final quarter of 2011. That occurred as other signs suggest the depressed housing market is starting to slowly turn around.

Sales of previously occupied homes rose in December for a third straight month. Mortgage rates have never been lower. Homebuilders are slightly more hopeful because more people are saying they might consider buying this year. And home construction picked up in the final quarter of last year.

And hiring has improved, which is critical to a housing rebound. Fewer people are seeking unemployment benefits than at any time in nearly four years, which is evidence of far fewer layoffs. The unemployment rate fell in December to its lowest level in nearly three years.

Economists caution that housing is a long way from fully recovering. Builders have stopped working on many projects because it's been hard for them to get financing or to compete with cheaper resale homes. For many Americans, buying a home remains too big a risk more than four years after the housing bubble burst.
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Though new-home sales represent less than 10 percent of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the National Association of Home Builders.

A key reason for the dismal 2011 sales is that builders must compete with foreclosures and short sales - when lenders accept less for a house than what is owed on the mortgage

Builders ended 2011 with a third straight year of dismal home construction and the worst on record for single-family home building. But in a hopeful sign, single-family home construction, which makes up 70 percent of the market, increased in each of the last three months.

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hightest2011

Huffy... any truth to the rumor that even Kenya claims that Obama was born in the USA? Kenya refuses to claim his stupidity ????

January 27 2012 at 9:33 AM Report abuse +3 rate up rate down Reply
dbogan3220

Hey gang lets just all vote Republican so they can turn it all over to the 1 per centers and while they are at it finish off the middle class altogether. Oh! Who is going to pay all those taxis, oh never mind future geneerations will take care of the US tax burden after we invade Iran to the tune of 2 trillion dollars or more.

January 27 2012 at 3:43 AM Report abuse -3 rate up rate down Reply
1 reply to dbogan3220's comment
hightest2011

deadbrain... Spoken like a true 99% leach on society. Keep voting for the nanny state... Obama loves you!!! Now what will you do when the companies keep leaving the good old Obama state and there are nobody left to tax??Bet the Cuban folks will let you immigrate? How about Syria??

January 27 2012 at 9:26 AM Report abuse +2 rate up rate down Reply
pyps

How about making intelligent comments. The housing bust started because of our friend BUSH, was president.. The recession started under his watch. He put us in such DOO DOO, I will surprised if we get out of whatever we are in shortly. Keep in mind it does'nt matter who is president, things will not change. Politicians are Politicians.

January 26 2012 at 3:49 PM Report abuse -3 rate up rate down Reply
2 replies to pyps's comment
cpo1514

Pyps... Ever heard of Barney Frank ? Chris Dodd? Nancy Peelosy? Harry Reed?? These folks werre in contro;of the house & senate in 2007(January) and gove out money like a drunk & sex crazed Liberal (dont ever offend the Military), So by the time the Occupant arrives and doesnt have a budget (or a clue) we have this big self inflicted Libral mess the TAXPAYERS need to clean up!. Dont believe it?/ then must be one of the folks that are uneducated being led by the uninformed.

January 26 2012 at 5:42 PM Report abuse +4 rate up rate down Reply
hightest2011

Zip for brains.... How much was the check for that you cashed from GE/ Obama/ Immelt/ Buffet ? Bet it was a good one as your comment identifies your thought process as incapable of having a reasonable thought! Bet you are one of the folks that are truly a follower of the 'feel good' leaches that are professional victims.... see you on the corner with the cardboard sign and a cup.... Feed me!!! I voted for Obama!!!!

January 27 2012 at 9:30 AM Report abuse +2 rate up rate down Reply
jdykbpl45

Way to go Obama! Please go, please, anywhere but here.

January 26 2012 at 3:31 PM Report abuse +4 rate up rate down Reply
cpo1514

So much for things getting better.. time for the White House Occupant to resign

January 26 2012 at 11:51 AM Report abuse +6 rate up rate down Reply