New Home Sales Plunge in November

The Census Bureau reports that new home sales plunged in November.Business Week reports:

Sales of new homes plunged in November by the largest amount in nearly 12 years, the most dramatic evidence yet that the booming housing market is starting to cool off.

The Commerce Department reported Friday that sales of new single-family homes fell by 11.3 percent last month to a seasonally adjusted annual rate of 1.245 million units.

Analysts had been expecting a drop of around 8.7 percent given that sales in October had jumped unexpectedly to an all-time high. But many said the size of the decline was a clear indication that the five-year boom in housing has peaked.

In addition to the big plunge in sales, the median price of a new home dropped by 4.1 percent from the October level to $225,200. That was up only 0.3 percent from November 2004, representing a marked slowdown from what been double-digit price gains.

The Census Bureau seems to quietly revise numbers.The old median new home price all-time high was $237,300 in February 2005,now they've revised August 2005 as the new all-time high at $240,100.Which means the new median home price has dropped 3 months in a row.We know it's frustrating to those trying to keep track of highs.That's why we will be watching the situation closely.We haven't seen anyone in the media making an issue of the fact that February 2005 is no longer considered the all-time high.