New home sales fall, housing recovery still on track
January 26, 2013 2:14 AM EST
New single-family home sales fell in December although the median sales price rose and the sector still appears set to be a bright spot in the country's economic recovery.
The Commerce Department said on Friday sales dropped 7.3 percent last month to a seasonally adjusted 369,000-unit annual rate. That was below analysts' forecasts of a 385,000-unit annual pace.
Government data for new home sales are subject to substantial revisions.
Indeed, the Commerce Department raised its estimate for sales in November by 22,000 to a 398,000-unit rate, making the pace of sales in November the fastest since April 2010.
The housing sector has been a point of strength in the economy over the last year, and is expected to help offset the economic damage from tax hikes enacted this year.
The median price for a new home rose to $248,900 in December from $245,600 in November, according to figures that are not adjusted for seasonal swings. Rising prices are seen as a sign of improving health in the housing market.
Economists think home building added to economic growth last year for the first time since 2005. Friday's report showed 367,000 new homes were sold last year, the most since 2009.
Still, that number remains about a third of the record number sold in 2005, before a housing collapse helped trigger the 2007-09 recession.
(Reporting by Jason Lange; Editing by Andrea Ricci)
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