New-home sales in 2010 fall to lowest in 47 years
WASHINGTON — Buyers purchased the fewest number of new homes last year on records going back 47 years.
Sales for all of 2010 totaled 321,000, a drop of 14.4 percent from the 375,000 homes sold in 2009, the Commerce Department said today. It was the fifth consecutive year that sales have declined after hitting record highs for the five previous years when the housing market was booming.
The year ended on a stronger note. Buyers purchased new homes at a seasonally adjusted annual rate of 329,000 units in December, a 17.5 percent increase from the November pace.
Still, economists say it could be years before sales rise to a healthy rate of 600,000 units a year.
“The percentage rise in sales looks impressive but 10 percent of next-to-nothing is still next-to-nothing,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics, referencing the December increase. “New home sales are bouncing around the bottom and we see no clear upward trend in the data yet.”
Builders of new homes are struggling to compete in markets saturated foreclosures. High unemployment and uncertainty over home prices have kept many potential buyers from making purchases.
Home prices fell in November in 19 of 20 major cities measured by the Standard & Poor’s/Case-Shiller index, and nine of those cities fell to their lowest point since the housing bust.
Economists expect prices will keep falling through the first six months of this year.