WASHINGTON — Sales of new homes fell 1.2% in November despite a big increase in demand in the Northeast, the Commerce Deparptment said today.
New single-family homes were sold at a seasonally adjusted annual rate of 664,000 units in November, compared to a revised rate of 672,000 units in October, when sales rose by 2.1%.
While the November decline indicated weakness in sales, the new report did show unexpected strength in October, a month originally reported as showing a 1.5% decline.
The fall in sales in November was accompanied by a big increase in prices. The median price of a new home jumped 12.3% to $119,000 last month, compared to $106,000 in October. The average price of a new home rose 13.2% to $140,300.
Analysts, however, discounted much of the price increase, saying it primarily reflected the fact that the big increase in sales occurred in the Northeast, the region of the country with the highest home prices.
Sales of new homes shot up 37.1% in the Northeast to a seasonally adjusted annual rate of 170,000 units in November.
Some analysts said the big sales gain in the Northeast may have been related to the weather, which was unusually mild in the region during November.
Sales were also up a smaller 3.4% in the West to a seasonally adjusted annual rate of 198,000 units.
Sales fell 16.4% in the South to an annual rate of 204,000 units and were down 7.1% in the Midwest to an annual rate of 92,000 units.
The decline in new home sales, the first since a 2.5% drop in September, mirrored a fall in sales of existing homes, which dropped 4.5% in November to an annual rate of 3.41 million units, according to a report released Monday by the National Assn. of Realtors.
Analysts said the weakness in sales of both new and existing homes probably reflected some unease caused by the fall in stock market prices along with concern over the volatility of mortgage rates.
Mortgage rates rose sharply just before the stock market crash only to decline in the weeks immediately following Oct. 19 as the Federal Reserve pumped money into the economy in an effort to cushion the shock to the financial system from Black Monday.