New Home Sales Strong in 1997
WASHINGTON (AP) _ New home sales slid sharply in December but not enough to prevent 1997 from registering the most sales in 19 years.
New single-family homes sold at a seasonally adjusted annual rate of 777,000 in December, a 9.3 percent drop from the month before and the sharpest decline in more than two years, the Commerce Department said today.
November, with a revised sales rate of 857,000, marked the highest monthly rate in 11 years.
For all of 1997, sales totaled 800,000, up 5.7 percent from 1996 and the highest total since 817,000 in 1978. Sales all year were supported by strong labor markets which produced the most buoyant consumer confidence in three decades.
Late in the year, falling mortgage rates, the result of skittish investors withdrawing from Asian markets, made home-buying more affordable.
Economists predict low rates will help sustain sales during the early part of this year but look for a slowdown after that.
``By midyear, we expect sales to slow because overall growth in the economy will slow, partly because of the Asian problems,″ said economist Michael Carliner of the National Association of Home Builders, which is projecting 767,000 sales this year.
Sales of existing homes last year totaled 4.21 million, bringing the total of new and existing sales to just over 5 million, the most ever.
Regionally, sales rose most strongly in the South for the year, up 7.4 percent to 362,000. They increased 6.8 percent in the Northeast to 79,000; 5.3 percent in the West to 220,000, and 1.5 percent in the Midwest to 139,000.
In December, sales fell in all regions _ down 11.8 percent in the Northeast, 11 percent in the Midwest, 10 percent in the West and 7.9 percent in the South.
Nationally, the median price of a new home last year _ meaning half sold for more and half for less _ was $145,500, up 3.9 percent from 1996.