Sales of new, single-family homes in December rose 17.5% over November to a seasonally adjusted annual rate of 329,000, the U.S. Census Bureau and the Department of Housing and Urban Development reported Wednesday. Even with the jump, however, sales remained 7.6% below the level of December, 2009.
The gain handily beat the Wall Street estimate of sales of 300,000 homes.
The median and average prices also rose significantly, with the median jumping 12% to $241,500 from $215,500 in November and $222,600 in December,2009 and the average price rising to $291,400 from $284,000 in November and $278,300 a year earlier.
Inventory fell 17.9% to a 6.9-month supply at the current sales rate from8.4 months in November and 7.8 months in December, 2009.
An estimated 321,000 new homes were sold in 2010, 14.2% below the 2009 figure of 375,000, the fifth consecutive year of decline and the lowest level of new single-family home sales on records going back 47 years. A normal market, considered healthy by analysts, would be marked by sales of 600,000 new single-family homes annually.
The national gain was driven primarily by the West region, where sales soared 71.9% from November to 110,000 homes on a seasonally adjusted basis.That was 32.5% ahead of December of 2009. Not seasonally adjusted, an estimated 7,000 homes were sold in the West during the month, up from 4,000 in November.
The South, the largest region by share of sales, was up only 1.8% from November to a seasonally adjusted annual rate of 168,000 sales, 8.7% behind the previous December. Not seasonally adjusted, an estimated 12,000 homes were sold in the South in December, essentially flat with November.
The Midwest was up 3.2% to a rate of 32,000 homes, off 37.3% from December, 2009. Not seasonally adjusted, sales were flat at 2,000 homes.
The Northeast was down 5% to a rate of 19,000 homes, 50% below December the year prior. Only 1,000 homes were estimated to have been sold, the same as November.
Roughly half the homes actually sold were priced between $150,000 and 299,999.
Analysts had mixed views of the data. Michael Rehaut at J.P. Morgan wrote to investors, "Overall, we view these data points as encouraging, as we note that December existing homes for sale also rose 12%, which supports, in our view, our outlook for stable to slightly improving housing demand."
David Goldberg at UBS put out a note urging caution in reading the data. "Although this suggests a reason for optimism, we're skeptical," he wrote. "Specifically, we note: 1) sales were 7.6% below '09 levels; 2) year-end is a seasonally slow time for housing; in turn, annualizing the monthly data may overinflate small changes; and 3) the majority of the increase was in the West +71.9% seq. Further, though it's hard to prove empirically, we're concerned that rising mortgage rates/tightening underwriting may be pulling forward demand."