WASHINGTON – Sales of new U.S. homes expectedly rose 2.9 percent in December as mortgage rates dipped, but home prices fell for a third month and the number of houses on the market hit a record, according to a government report on Friday.
For the year, the Commerce Department said a record 1.282 million new homes were sold, up 6.6 percent from 2004, capping a five-year rally in the U.S. housing market that sent sales and construction levels to new highs.
Sales of new single-family homes climbed to a 1.269 million unit annual pace in December after falling sharply the previous month. The department revised November's sales pace down to a 1.233 million pace from an originally reported 1.245 million unit rate.
Wall Street economists had expected sales to slow slightly in December to a 1.225 million unit pace.
While sales rose in December, the inventory and price data suggested some cooling in the housing market.
The number of new homes on the market at the end of December climbed 2.4 percent to 516,000, marking a new high. At the current sales pace, that represented 4.9 months' supply.
The median home sales price continued to decline as well, down 2.2 percent to $221,800 in December, the Commerce Department said. That marked the third month in a row of declining prices.
Earlier this week, a trade group said sales of existing homes fell 5.7 percent in December to the lowest level since March 2004. That marked the third monthly decline in a row. But for the year, home resales hit a record 7.072 million, the National Association of Realtors said.
The cooling began as mortgage rates started to climb in September. Long-term rates dipped in December, but in the latest week, the 30-year fixed-rate loan rose to 6.12 percent, up from 6.10 percent the previous week, according to data from Freddie Mac.
New home sales last month soared 22.7 percent in the U.S. Midwest and 11.1 percent in the West, but fell 23.3 percent in the Northeast and 2.6 percent in the South.
The homes sales data is subject to major revisions, as the statistics are estimated from sample surveys.