Friday, July 25th12.7°C
22716

US sales of new homes drop in December but for all of 2013 climb to strongest level since 2008

WASHINGTON - U.S. sales of new homes fell in December for a second consecutive month but even with the pause at the end of the year, sales for all of 2013 climbed to the highest level in five years.

Sales of new homes dropped 7 per cent in December to a seasonally adjusted annual rate of 414,000, the Commerce Department reported Monday. In November, sales had fallen 3.9 per cent.

For the whole year, sales were up 16.4 per cent to 428,000, the highest level since 2008.

It marked the second year that sales have risen after six consecutive annual declines as the housing industry was rocked by the collapse of a housing bubble. Sales of new homes peaked at 1.28 million in 2005. Analysts expect further sales gains in 2014.

The median price of a new home was $270,200 in December, up 4.6 per cent from a year ago and up 0.6 per cent from November. The median is the point where half the homes sell for more and half for less.

There were 171,000 new homes on the market at the end of December, a drop of 2.8 per cent from November. At the December sales pace, that would represent a 5 month supply. That is lower than the six-month supply that economists view as healthy.

Housing was one of the strongest sectors of the recovery in the first half of 2013, but then it hit a lull during the summer when mortgage rates jumped on indications the Federal Reserve might soon start reducing the bond purchases it was making to keep long-term interest rates low.

But analysts are looking for housing to regain some of its lost momentum as the industry enters the all-important spring buying season. Analysts expect that continued improvements in the labour market will boost incomes and that will lead to stronger demand for homes.

Sales of previously occupied homes rebounded 1 per cent in December helping that market to sales for all of 2013 of 5.09 million. That was the best performance since 2006 when sales totalled 6.48 million. However, the sales gains in both 2005 and 2006 represented an unsustainable housing boom which collapsed, helping drag the economy into a deep recession which triggered a painful retrenchment in housing.

Analysts expect housing will keep recovering in 2014 but they don't look for the sales gains to be as large as they were in 2013.

Economists at Global Insight predict that growth of existing home sales will slow a bit from the 8.8 per cent gain in 2013 but still show a respectable increase of 5.1 per cent in 2014.

Mortgage rates rose in the summer to nearly a full percentage point higher than they were in the spring, when they were at record lows. And a limited supply of homes on the market helped drive up prices. The combination of rising mortgage rates and rising prices made home buying less affordable, particularly for first-time buyers.

Builders started work on 923,000 new homes and apartments in 2013, up 18.3 per cent from 2012. It was the fourth straight annual gain and the strongest construction pace since 2007 when 1.36 million homes were started.

The Canadian Press


Read more Business News

21623


Recent Trending




Today's Market
S&P TSX15394.45+0.07
S&P CDNX1011.65-0.58
DJIA17083.80-2.83
Nasdaq4472.107-1.59
S&P 5001987.98+0.97
CDN Dollar0.9295-0.0012
Gold1297.50-7.00
Oil104.30-0.29
Lumber326.00+0.20
Natural Gas3.829-0.018

 
Okanagan Companies
Pacific Safety0.200.00
Knighthawk0.01-0.005
QHR Technologies Inc1.17+0.02
Cantex0.08+0.02
Anavex Life Sciences0.28-0.045
Metalex Ventures0.08+0.01
Russel Metals35.57-0.08
Copper Mountain Mining2.82+0.06
Colorado Resources0.205-0.01
ReliaBrand Inc0.10+0.019
Sunrise Resources Ltd0.025-0.005
Mission Ready Services0.19+0.01

 





FEATURED Property
18559914810 Malpass Road
4 bedrooms 3 baths
$757,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Geopolitical tensions rattle markets

The Big Picture Geopolitical tensions rattle markets The spectre of rising geopolitical tensions in Ukraine and Gaza cast a shadow over an otherwise positive week in the markets. News that a passenger...


Labour shortage in BC

The mainstream media are finally waking up to something unusual in British Columbia – a labour shortage. If the experience of Alberta is a guide to our own future, the highly skilled labour will...


Learn to delegate effectively

Photo: ContributedI have the pleasure of witnessing people delegate tasks quite often. Sometimes with tremendous success and sometimes with disastrous consequences. I have chaired a lot of committees...

_








Member of BC Press Council


22707