WASHINGTON -- Sales of new homes bounced back in November and have now posted increases in three of the past four months, a hopeful sign that this year's severe drop in housing may finally be coming to an end.
The Commerce Department reported yesterday that sales of new single-family homes rose 3.4 percent last month to a seasonally adjusted annual rate of 1.047 million units.
That was better than the 1.1 percent gain economists had been expecting and the government also revised the previous three months to show stronger activity.
Housing, which had been one of the economy's standout performers, has been battered this year as interest rates were rising in the spring and potential buyers began to balk at paying prices which had surged to record levels, reflecting five boom years for sales.
The median price of a new home sold last month rose to $251,700, up 3.2 percent from the October level and 5.8 percent higher than a year ago.
However, analysts said the price increase was due primarily to increased sales in high-priced regions of the country such as the Northeast and West. Sales fell in the South, however, where home prices are generally lower.
They predicted further price declines in the months ahead because the inventory of unsold homes, despite recent declines, remains at elevated levels.
The median price, the midpoint for homes sold in a given month, peaked at a record of $257,000 in April.
The housing slowdown has had a major effect on the economy, shaving 1.2 percentage points from growth in the July-September period and probably an equal amount from growth in the current quarter.