Sales of new homes slumped 9.6 percent in December, the government reported today, helping to drag sales in 1989 to their lowest level in five years.
The Commerce Department said new single-family homes were sold at a seasonally adjusted annual rate of 629,000 units in December after rising a revised 9.3 percent in November. November sales originally were reported up 9.6 percent.
For the year, sales totaled 650,000, down 3.8 percent from the 676,000 sales in 1988. Sales in 1989 were the lowest since 639,000 units were purchased in 1984. Analysts have cited high mortgage rates for the decline.
The Commerce Department reported that the median price of a new home in December rose 4.1 percent to $130,100, and 6.7 percent to $121,000 for the year. The median means that half of the homes cost more, half less.
In another report, the realtors said their housing affordability index improved, measuring 108.2 in December, meaning that a family earning the national median income of $33,600 had 108.2 percent of the income needed to qualify for conventional financing covering 80 percent of a home priced at $92,500, the median existing home price for that month. It had been 105.5 in November.