New home sales hit seven-month high

WASHINGTON?? New U.S. single-family home sales rose to a seven-month high in November and the months' supply of houses on the market was the lowest in 5-1/2 years, adding to signs of a budding recovery in the sector.

The Commerce Department said on Friday sales rose 1.6 percent to a seasonally adjusted? annual rate of 315,000 units. Octobers' sales pace was revised up to 310,000 units from the previously reported 307,000 units.

Economists polled by Reuters had forecast sales at a 313,000-unit rate. In the 12 months through November, new home sales were up 9.8 percent.

Coming on the heels of data this week showing a rise in sales of previously owned homes and surge in housing starts, the report implied a recovery was starting to take shape in the housing market.

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But there's a long way to go for housing, which has been in a deep hole for the past few years. Friday's sales rate was less than half the 700,000 new homes that economists say should be sold to sustain a healthy housing market.

It's also below the 323,000 homes sold last year -- the worst year for sales on records dating back to 1963.

The housing market, which triggered the 2007-09 recession, remains constrained by an oversupply of unsold homes, falling prices and high unemployment.

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Sales were up in two of the four regions, with the number of homes sold in the Midwest the highest since November 2009.

The median sales price for a new home fell 3.8 percent to $214,100 last month. Compared to November last year, the median price was down 2.5 percent.

There were a record low 158,000 new homes on the market last month, and at November's sales pace, it will take six months to clear them ? the shortest amount of time since March 2006. That compared to 6.2 months in October.

A six-month supply is generally considered ideal, with higher readings indicating steep price declines.

Reuters and The Associated Press contributed to this report.

Source: http://www.msnbc.msn.com/id/45776523/ns/business-real_estate/

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