New Homes Sales Dip for Second Straight Month

Economic IndicatorsReuters

Sales of new U.S. single-family homes fell for a second straight month in November, a sign that the housing market recovery remains fragile.

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The Commerce Department said on Tuesday that sales declined 1.6 percent to a seasonally adjusted annual rate of 438,000 units. October's sales pace was revised down to 445,000 units from 458,000 units.

Economists polled by Reuters had forecast new home sales rising to a 460,000-unit pace last month.

New home sales, which account for about 8 percent of the housing market, tend to be volatile month to month. Compared to November last year, sales were down 1.6 percent.

A report on Monday showed home resales tumbled to a six-month low in November.

The housing market is being hobbled by a slow pace of household formation, a result of sluggish wage growth. An acceleration is expected next year as a strengthening labor market fosters a faster pace of wage growth.

Last month, new home sales fell in the Northeast, the Midwest and the South. They rose 14.8 percent in the West.

The stock of new houses available on the market rose 1.4 percent last month to 213,000, the highest since May 2010.

At November's sales pace it would take 5.8 months to clear the supply of houses on the market, up from 5.7 months in October. The median new home price rose 1.4 percent from a year ago to $280,900.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)