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New-home sales fall, trees exult

By Judy Martel · Bankrate.com
Tuesday, January 28, 2014
Posted: 4 pm ET

New-home sales dropped 7 percent in December, according to the Commerce Department, to a seasonally adjusted 414,000 units, down from 445,000 in November.

Shivers, not shovels

Just as with housing starts, which also declined by 7 percent in December, cold weather is partly to blame for keeping buyers away, especially in the Northeast and Midwest. New-home sales in the Northeast fell 36.4 percent, the largest decline since 2012. Housing starts in the Midwest fell 33.9 percent, the Commerce Department reported last week.

Getting better…

But the forecast for housing looks better when viewing the year as a whole: In 2013, 428,000 single-family homes were sold, the highest number since 2008 and a 16.4 percent increase over 2012.

… if you like rising prices

Lack of available homes for sale, along with rising home prices, are likely to sustain a housing recovery. Home prices gained for nine straight months until November, when they dropped by 0.1 percent from a month earlier due to the cold weather, according to the Standard & Poor's/Case-Shiller 20-city home price index. For all of 2013, prices rose by 13.7 percent.

Nine of the 20 cities in the index saw price gains, with Dallas improving by 9.9 percent for the year and Chicago gaining 11 percent.

The median home price was $265,800 for the year, according to the Commerce Department. That's an 8.4 percent increase over the year before, and the largest since 2005.

Keep up with your wealth and mortgages and follow me on Twitter @JudyMartel.

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