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Sales of New Homes Decline 1.2% in Month : Only Northeast Sales Are Up; Average Price Jumps

December 31, 1987|Associated Press

WASHINGTON — Sales of new homes edged down 1.2% in November as a huge jump in demand in the Northeast was insufficient to offset weakness in the rest of the country, the government reported Wednesday.

The Commerce Department said new single-family homes were sold at a seasonally adjusted annual rate of 664,000 units in November following an increase of 2.1% in October.

The decline in sales was accompanied by a big jump in prices, with the median price of a new home soaring by 12.3% to $119,000 last month.

However, analysts said the price advance was a reflection of a shift in regional sales patterns last month rather than any sign that housing prices were about to skyrocket.

The Northeast, which has the highest home prices of any region, enjoyed a giant 37.1% jump in sales last month while the other three geographic regions suffered sales declines.

Analysts said much of the increase in the Northeast could be attributed to unusually mild weather during the month, which boosted sales.

Still, they said, the overall decline could have been much worse, given the record plunge in stock prices in October that caused consumer confidence to falter.

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