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New Home Sales

Monday, January 28, 2008

WASHINGTON (AP) - Government data released Monday is forecast to show new home sales dropped slightly in December.

The Commerce Department is expected to report that new home sales dipped 0.3 percent in December from a month earlier to a seasonally adjusted annual rate of 645,000 units, according to the consensus forecast of Wall Street economists surveyed by Thomson/IFR.

The report is scheduled to be released at 10 a.m. EST. If the results meet analysts' expectations, they will be 36.7 percent below year-ago levels.

A month ago, the government reported new home sales plummeted 9 percent in November from October to a rate of 647,000 units, or 34.4 percent below-year ago levels.

Many builders such as Centex Corp., Pulte Homes Inc. and Hovnanian Enterprises Inc. were caught with a glut of unsold properties this year when mortgages became hard to get and sales slowed. Builders have slashed prices, but many buyers have stayed on the sidelines because they're having trouble getting mortgages and believe prices will continue to fall.

Sales of existing single-family homes plunged in 2007 by the largest amount in 25 years, and median prices fell for the first time in at least four decades, the National Association of Realtors said last week.

Miami-based Lennar Corp. last Thursday reported a fourth-quarter loss of $1.25 billion, and a $1.9 billion loss for all of 2007. "We are not expecting market conditions to improve, and perhaps might continue to decline in the near term," Lennar President and Chief Executive Stuart Miller said.

Nevertheless, shares of major U.S. homebuilders rallied last week, on hopes that the Federal Reserve's rate cut and an economic stimulus package could boost the flagging industry.

Posted by MOHAMED SAID at 5:32 AM  

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