New home sales plummet to lowest level in more than 12 years
The slump worsened even more than most analysts expected, heightening fears that the country might be thrust into a recession.
New-home sales tumbled 9 percent in November from October to a seasonally adjusted annual sales pace of 647,000, the Commerce Department reported Friday. That was the worst sales pace since April 1995.
The housing picture turned out to be more grim than most anticipated. Many economists were predicting sales to decline by 1.8 percent to a pace of 715,000.
By region, sales fell in all parts of the country, except for the West.
In the Midwest, new-home sales plunged 27.6 percent in November from October. Sales dropped 19.3 percent in the Northeast and fell 6.4 percent in the South. In the West, however, sales rose 4 percent.
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NEW YORK (AP) ‘ Wall Street finished an erratic week narrowly mixed Friday after a government report of a steep decline in new home sales stirred concerns that weakness in housing will continue to dog the economy. The major indexes lost ground for the week.
The Commerce Department report that new home sales fell 9 percent from October to a seasonally adjusted annual rate of 647,000 triggered renewed nervousness that consumers could become uneasy and tamp down their spending.
Stocks, which fell more than 1 percent Thursday following unwelcome economic readings and the assassination of Pakistani opposition leader Benazir Bhutto, fluctuated through the day Friday. The Chicago purchasing managers’ index had for a time offered some support to investor sentiment Friday after it showed a stronger-than-expected increase for December manufacturing activity in the Midwest.
But Wall Street appeared unable to hold onto its enthusiasm for too long ‘ repeating a pattern that has become commonplace since the summer. Investors are eager for any economic data that can help illuminate whether weakness in the housing and financial sectors is undercutting the overall economy, possibly leading to a recession.
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NEW YORK (AP) ‘ Town governments, school districts and other municipalities looking to borrow money got a new option Friday when trying to insure their bonds: billionaire investor Warren Buffett.
Buffett’s formation of a bond insurance company provided some validation to an industry that has been battered by fears of collapse in recent weeks.