Sales of newly constructed homes plunged in December as the housing market’s recovery sputtered.
New-home sales declined to a seasonally adjusted annual rate of 536,000, the Commerce Department said Thursday. That was 10.4% lower than an upwardly adjusted November pace of 598,000 and 0.4% lower than a year earlier.
Economists surveyed by MarketWatch had forecast a 595,000 rate.
The median sale price in December was $322,500, 4.3% higher than in November and 7.9% higher than in December 2015. Lower sales boosted available supply: At December’s selling pace, it would take 5.8 months to exhaust available inventory.
The government’s data on sales of new homes is notoriously choppy and often revised heavily. And the housing market has made uneven progress since the financial crisis and recession. Still, the trend in new-home sales, like in the broader market, is up: Commerce estimates 563,000 new homes were sold in 2016, 12.2% higher than in 2015, making 2016 the best year since 2007.
The stumble in December may reflect inventory that’s too tight to accommodate all would-be buyers. Builders have been reluctant to ramp up construction even as demand remains strong. Supply is only just creeping back to levels considered healthy.
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