New-home sales plummeted last year as builders struggled to unload a glut of houses, and the sales rate hit a record low, according to government data released yesterday.
Builders cut production and prices but are competing against a backlog of foreclosed properties that are selling at significant discounts, economists said. Until more buyers venture back into the market, prices will continue to fall and sales will remain slow, they said.
In December, new-home sales tumbled 15% compared with November, to an annualised rate of 331,000 sales, and were down 44.8% compared with December 2007, according to the Commerce Department. For all of 2008, builders unloaded 482,000 new single-family houses, down 37.8% from 2007. That is the biggest year-over-year sales decline on records that go back to 1963.