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Home Sales Slip in November, But Record Expected for 2003

The seasonally adjusted annual rate of new single-family home sales decreased slightly in November, while attractive mortgage rates and strong appreciation in housing prices were expected to push sales for the year beyond the one million unit mark, which would be a record.

The Commerce Department reported last month that new homes were sold in November at an annual rate of 1.082 million units, a dip of 2.4% from October.

“Builders have seen an extraordinary year and builder confidence across the country continues to be upbeat,” said NAHB President Kent Conine, adding that “the environment for housing appears strong heading into 2004.”

“Some slowdown in sales was expected toward the end of the year,” said NAHB Chief Economist David Seiders, because the bottoming-out of mortgage rates around mid-year motivated some “fence sitters” to jump into the market, precipitating home buying in the third quarter that otherwise would have been delayed until the final quarter of the year.

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Seiders said that NAHB is projecting 1.084 million home sales for the year as a whole, an increase of 11% over the record sales level of 2002. This would be the first time that sales have exceeded one million units.

November sales declined 10.1% in the Midwest, 6.5% in the Northeast and 1.3% in the West; they increased by a modest 0.4% in the South.

The inventory of new homes for sale in November increased slightly to 363,000 units, a 4.1-month supply at the current sales pace but low by historical standards.

Existing Home Sales Slip in November, But Remain Strong

Existing home sales slipped 4.6% in November to a seasonally adjusted annual rate of 6.06 million units, the National Association of Realtors® reported on Dec. 30, but remained 6.9% higher than they were during the same month a year earlier.

David Lereah, the association’s chief economist, predicted that 2003 would set a record for home resales and that 2004 is “likely to be the second-best year on record” for sales.

Existing home sales declined 2.4% in the West, 4.1% in the Northeast, 5.1% in the South and 6.6% in the Midwest
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