New home sales declined 11.3% last month, the biggest drop in more than a decade:
WASHINGTON — New-home sales posted the biggest fall in nearly 12 years last month, while a strong surge in the volatile aircraft sector boosted demand for expensive manufactured goods.
Amid mounting interest rates, sales of single-family homes decreased 11.3% to a seasonally adjusted annual rate of 1.245 million, the Commerce Department said Friday. The plunge was the deepest since sales fell 23.8% in January 1994. Wall Street expected an 8.7% slide.
“The sharp drop in new home sales may be the first sign that the housing market is finally hitting a wall even if the level is still decent,” said Joel Naroff, president of Naroff Economic Advisors Inc. in Holland, Pa…
The Commerce report on new home sales showed inventories climbed to a record last month, while prices tumbled. The average price of a home decreased to $283,300, down from a revised $290,600 in October. There were an estimated 503,000 homes for sale at the end of November, a record high. That represented a 4.9 months’ supply at the current sales rate — the highest since 5.0 in December 1996.
There have been other signs the housing market is cooling after years of climbing prices and brisk construction activity. For instance, U.S. existing-home sales in October fell 2.7%. Financing costs have been creeping upward. Freddie Mac data show the average 30-year mortgage rate was 6.33% in November, the highest monthly level since 6.49% in July 2002.