NEW YORK—A latest government report released on Wednesday showed that new home sales in November plunged 11.3 percent, a dismal showing that came in below expectations.
The 11 percent decline compared to October 2009 is alarming to analysts and economists, as it shows that the real estate market remains tenuous and consumers may be overly dependent upon governmental subsidies.
After a rise in new home sales in October, a federal tax-credit offered to new home buyers set to expire by the end of November was extended by Congress to April 2010. Prospective home buyers largely sat on the sidelines after the news of the credit extension.
The U.S. Commerce Department said that new home sales last month came in at a seasonally adjusted rate of 355,000 last month, far lower than the 400,000 units projected.
Economists polled by Thomson Reuters had expected 440,000 sales last month.
The 11 percent decline compared to October 2009 is alarming to analysts and economists, as it shows that the real estate market remains tenuous and consumers may be overly dependent upon governmental subsidies.
After a rise in new home sales in October, a federal tax-credit offered to new home buyers set to expire by the end of November was extended by Congress to April 2010. Prospective home buyers largely sat on the sidelines after the news of the credit extension.
The U.S. Commerce Department said that new home sales last month came in at a seasonally adjusted rate of 355,000 last month, far lower than the 400,000 units projected.
Economists polled by Thomson Reuters had expected 440,000 sales last month.
