US new home sales slump 11.3 per cent

WASHINGTON: Sales of new US homes slid 11.3 per cent in November to their lowest level since April, according to government data on Wednesday highlighting volatility in the fragile housing market.

The Commerce Department sales sales plunged to a seasonally adjusted annual pace of 355,000 from a downwardly revised 400,000 in October.

The figure was far below analyst expectations for a pace of 440,000 new home sales.

The report dampened optimism about a rebound in the critical housing sector, which had risen after data Tuesday showing a 7.4 per cent rise in the larger market for existing home sales.

The latest report also showed an ongoing glut of unsold homes and a mixed picture for prices.

The inventory of new homes fell slightly to 235,000 from 240,000 a month earlier. But because of a slower sales pace, this represented a rise to 7.9 months in the stock of unsold homes, from 7.2 per cent.

The median price rose 8,000 dollars from October to 217,400 dollars and the average price increased 18 per cent to 280,300. But on a year-over-year basis, median prices were down around two per cent and average prices off three per cent.

Michael Zoller at Moody's Economy.com said the surprisingly weak report negates several months of gains.

"Price discounting eased in November, although the median new home price is notoriously volatile," he said.