biz.yahoo.com/ap/051223/economy.html?.v=10
AP New Home Sales Plummet in November Friday December 23, 10:37 am ET By Martin Crutsinger, AP Economics Writer New Home Sales Plunge in Nov. Durab le Goods Orders Up WASHINGTON (AP) -- Sales of new homes plunged in November by the largest amount in nearly 12 years, providing the most dramatic evidence yet that the red hot housing market over the last five years is starting to cool down.
Last month's decline was even bigger than the 87 percent drop-off that W all Street analysts had been expecting. While sales of both new and exis ting homes are still on track to set records for a fifth straight year i n 2005, analysts are forecasting sales will decline in 2006 as the housi ng boom quiets down. Analysts are looking for home sales to dip by around 6 percent next year under the impact of rising mortgage rates. Analysts believe that house p rices, which had been soaring at double digit rates, will moderate as we ll. Some of that price moderation was evidenced in the November report, which showed that the median price of a new home sold was $225,200 last month . That was up just 03 percent from November 2004, the weakest year-over -year price change in two years. The November median price was down 41 percent from the October median sales price of $234,800. factories for big-ticket manufactured goods jumped to a record $223 billion in November. That was a 44 percent increase from October, repre senting the largest percentage advance in six months. Orders for durable goods had risen 3 percent in October. The gain in demand for durable goods was far above the 11 percent increa se Wall Street analysts had been expecting. Excluding transporta tion, durable goods orders dropped by 06 percent, the third straight mo nthly decline in these categories. Some economists are worried that housing prices in some areas have been d riven higher by a speculative frenzy that could see prices plunging as s ales slow in the hottest markets. That scenario would evoke memories of the sharp declines that occurred when the stock market bubble burst in e arly 2000. The 44 percent rise in orders for durable goods, items expected to last at least three years, was the largest one-month advance since a 73 perc ent rise last May Analysts had expected a big gain in aircraft orders because of the sales success Boeing Co. Analysts said that Boeing booked 148 new plane orders for the month compared to 36 orders in Octob er. Excluding aircraft, non-def ense capital goods actually fell by 2 percent last month.
The informati on contained in the AP News report may not be published, broadcast, rewr itten, or redistributed without the prior written authority of The Assoc iated Press.
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