The Wall Street Journal-20080129-Economic Snapshot- Sales of New Homes Drop to a 12-Year Low

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Economic Snapshot: Sales of New Homes Drop to a 12-Year Low

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U.S. new-home sales tumbled last month to their lowest in 12 years, and prices fell sharply.

Sales of new homes declined 4.7% in December to a seasonally adjusted annual rate of 604,000, the worst showing since 559,000 in February 1995, the Commerce Department said. Home sales fell 13% in November to a 634,000 pace.

Last month's new-home sales were down 41% from a year earlier.

The median price of a new home fell by 10% to $219,200 in December from $244,700 in December 2006. The average price dropped by 12% to $267,300 from $301,900 a year earlier.

An estimated 495,000 new homes were for sale at the end of December, down from November's 502,000. But at the current sales pace, it would take 9.6 months to sell the homes. In November, inventories represented 9.4 months of sales.