Justin Sullivan/Getty Images
Workers install windows on a home under construction at a housing development in Richmond, Calif., in September 2007.
Workers install windows on a home under construction at a housing development in Richmond, Calif., in September 2007. Justin Sullivan/Getty Images
Sales of new homes sank last month to the lowest level in more than a dozen years, a grim sign of consumers' reluctance to buy and stricter lending despite lower interest rates.
The Commerce Department on Friday reported a 9 percent drop in the sale of new homes in November to a seasonally adjusted annual rate of 647,000.
That was the worst showing since April 1995, when the pace of sales was 621,000.
Over the last 12 months, new-home sales nationwide tumbled by 34.4 percent, the biggest annual slide since early 1991 and striking evidence of the collapse in the once high-flying housing market.
The sales pace for November was dramatically slower than expected. Economists were predicting sales in the weakest sector of the economy to drop by around 1.8 percent, to a pace of 715,000.
The median sales price of a new home dipped to $239,100 in November. That is 0.4 percent lower than a year ago.
Sales were down in every region except the West, where they rose 4 percent.
In the Northeast sales plummeted 19.3 percent; in the Midwest they plunged 27.6 percent; and in the South they were down 6.4 percent.
The severe slump follows five years of record-breaking purchasing from 2001 through 2005.
Prices fell as sales slowed.
The boom-to-bust housing market caused the entire economy to wobble as banks took hits from a wave of lending to those with weak credit for homes that ended in foreclosure.
Foreclosures have soared to record highs and are likely to keep rising as low-introductory rate mortgages begin to reset much higher, becoming unaffordable.
With credit now harder to obtain, the housing market's woes are projected to worsen. The inventory of unsold homes is swelling.
From NPR reports and The Associated Press