New-home sales plummeted by nine percent in November from October to a seasonally adjusted annual rate of 647,000 according to a report released by the Department of Commerce and the Department of Housing and Urban Development on Friday. November's numbers are the worst showing since April 1995, when the pace of sales was 621,000.
The report also revealed that the median sales price of a new home dipped to $239,100, 0.4 percent lower than a year ago.
From October to November, new-home sales dropped 19.3 percent in the Northeast, sank 27.6 percent in the Midwest and dipped 6.4 percent in the South. Sales in the West increased 4 percent.
Year-over-year, the numbers reveal more grim news. New-home sales are down nationally 34.4 percent. Regionally, sales are down in all regions. The Northeast plunged 28.1 percent, the Midwest slipped 38.7 percent, the South is down 34.3 percent, and the West decreased 33.8 percent.
Economist Patrick Newport of Global Insight, a Massachusetts-based economic and financial analysis firm, notes, however, that these numbers may change. Carl Reichardt, a Wachovia Capital Markets senior equity research analyst echoed a similar sentiment.
"This data set is volatile," Reichardt said. "We caution that one month of new-home sales data does not make a trend, as these data are volatile and often revised over the three months following initial publication."
Despite the grim findings, Newport believes change is on the horizon. Builders continue to slash the prices of new homes, and Newport predicts that will prompt buyers to return.
"A turnaround will come in the next six months," Newport told BUILDER Online. "This report is a continuation of a trend but we are getting near the end of the cycle."