Sales of new homes in the US declined to their lowest levels in 17 years, after a lackluster November in which sales fell by another 2.9%. Sales fell to a seasonally adjusted annual rate of 407,000. The report was above expectations, though, as economists were expecting a number closer to 400,000. Sales of new homes are now down 35.3% compared with November 2007.

The inventory of unsold homes plunged 7.0% to 374,000, the 18th consecutive monthly decline and the lowest level since February 2004. But because the sales pace has been so weak, the month supply has stayed high. At the November sales pace, the inventory represented 11.5 months’ supply of homes. A year ago, that number stood at 9.3 months.

Regionally, sales plunged 16.4%in the Midwest and 7.1% in the South. Sales rose 14.3% in the Northeast and 11.0% in the West. The median price of new home sales in these regions for November were $220,400.

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