2011 was the worst year on record for sales of new homes. The dismal year was capped by a drop in home sales in December.
The AP reports:
"The Commerce Department said Thursday new-home sales fell last month to a seasonally adjusted annual pace of 307,000. The pace is less than half the 700,000 that economists say must be sold in a healthy economy.
"About 302,000 homes were sold last year. That's less than the 323,000 sold in 2010, making 2011 the worst year on records dating back to 1963.
"The median sales prices for new homes dropped in December, as builders continued to slash prices. It fell 2.5 percent to $210,300."
The unexpected decline, reports CNBC, tempered the early rally the market had in response to good news on durable goods.
Reuters reports that the housing market is still "constrained by high unemployment, falling prices and an oversupply of unsold homes following a bust that triggered the 2007-09 recession."