The Commerce Department reported this morning that sales of new single-family houses in November fell 9.0% to a seasonally adjusted annual rate of 647,000, its lowest rate in 12 years, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. The rate is 34.4% below that of November, 2006.

The numbers for October, which originally reported as a 1.7% increase in new-home sales, were revised downward by 2.3% to 711,000 from the orignally reported 728,000. Month's supply crept back up to 9.3 from 8.8 in October, and inventory levels declined from a revised 514,000 for October to 505,000 for November.

The median sales price of new houses sold in November 2007 was $239,100, up from $217,800 in October. The average sales price was $293,300, down from $305,800 in October.

Regionally, sales on a month-to-month basis fell 19.3% in the Northeast; 27.6% in the Midwest, 6.4% in the South but rose 4.0% in the West. Compared to November, 2006, new-home sales were down 28.1% in the Northeast, 38.7% in the Midwest, 34.3% in the South and 33.8% in the West.

In a research note to investors, Carl Reichardt, home building analyst for Wachovia Securities, said, "The only potential positive we see is that inventory continues to decline on an absolute basis, with eight consecutive sequential declines in homes available for sale. However, with the slower sales pace, months supply increased this month, and at 9.3 months is only modestly below the peak of 9.4 achieved in August. On a trailing 12-month basis, builders continue to complete more homes without selling them than reduce finished inventory on their books, as they have since March 2004, a trend that we believe must reverse itself before the new home market recovers."

Similarly, Michael Rehaut of J.P. Morgan wrote, "While absolute inventory fell slightly, down 1.8% sequentially to 505K, we believe the decline is not too meaningful given cont. highly elevated existing home inventory levels, which are 8.8x the size of new-home supply, and represent the core problem of the overall housing market, in our view." Rehaut went on to say that, "We believe today's highly elevated inventory levels will cause further significant pressure on pricing, and drive large impairment charges over the next few quarters, pushing the emergence of a trough further out."