WASHINGTON — Sales of new U.S. homes cooled in December but for the entire year were the best since 2009.
The Commerce Department said Friday that newhome sales fell 7.3 percent last month to a seasonally adjusted annual rate of 369,000. That’s down from November’s rate of 398,000, which was the strongest in 2 1/2 years.
For the year, sales rose nearly 20 percent to a rate of 367,000. That’s the most since 2009, although the increase is coming off the worst year for new-home sales since the government began keeping records in 1963. Sales are still below the 700,000 level that economists consider healthy.
Last year “was the first year we’ve seen a sustained recovery in housing,” said Celia Chen, a housing economist at Moody’s Analytics in West Chester, Pa. “This year will be even better. On the supply side, inventories are pretty tight. On the demand side, things are definitely improving, and that’s because job growth is in place.”
The housing market began to recover last year, roughly five years after the housing bubble burst.
Sta-ble job gains and record-low mortgage rates encouraged more people to buy homes. Prices have been rising on a sustained basis. And builders started to increase construction of new homes, partly because the number of new homes had fallen so low.
Jennifer Lee, a senior economist at BMO Capital Markets, said the December decline in sales of newly built homes wasn’t a cause for worry. She expects sales to improve this year.
In a note to clients, she said figures for November, October and September were revised higher. And many buyers may have held off last month because of uncertainty over taxes. The White House and Congress reached a deal on Jan. 1 to keep income taxes from rising for most Americans.
“Take December’s drop with a grain of salt, especially given all of the uncertainty about what will happen to taxes in the new year,” Lee said. “And with new mortgage applications already picking [up] in the first three weeks of January, we should see a better report next month.”
For December, new-home sales fell 29 percent in the Northeast, 11 percent in the West and roughly 8 percent in the South. Only the Midwest showed strength, with sales rising 21.3 percent.
The median price for a new home rose in December to $248,900, meaning half the houses sold during the month cost more than $248,900, and half sold for below.
The supply of homes for sale also inched up to 151,000 - the most in a year. Fewer homes for sale have helped drive prices higher and made many markets more competitive. They also have encouraged more home building. The rate of new-home sales remains far below a bubble peak of almost 1.4 million in 2005.
“Although the decline [in December new-home sales]) comes as a disappointment, it does little to change the picture of a housing recovery,” wrote analysts with RDQ Economics in a research note. “Our view is the weight of evidence pointsto continued improvement in the new housing market.”
The housing market has a long way back to a full recovery. But most economists expect the recovery will strengthen this year.
Though new homes represent less than 20 percent of the housing sales market, each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to data from the National Association of Homebuilders.
The gains in home building helped increase construction hiring in December by 30,000 jobs, the most in 15 months.
Friday’s report showed the supply of new homes at the current sales rate climbed to 4.9 months from 4.5 months in November. There were 151,000 new houses on the market at the end of December, up from 149,000 the previous month.
There were 1.82 million previously owned homes on the market in December, the fewest since January 2001, according to National Association of Realtors data released earlier this week.
Information for this article was contributed by Martin Crutsinger of The Associated Press; by Alex Kowalski and Christ Middleton of Bloomberg News; and by Ruth Mantell of MarketWatch.
Front Section, Pages 1 on 01/26/2013