New home sales fell much farther than expected in November, hitting their lowest point since 1995, Bloomberg reports, and the slide only likely to get worse. Sales fell to an annual pace of 647,000, a 9% drop from October’s revised-down 711,000 rate. Prices are falling, but buyers either aren’t interested or can’t get loans because of tighter credit conditions.
Though home inventories fell 1.8% to a 2-year low, demand fell even further. At these prices, there’s a 9.3-month supply, up from October’s 8.8. New home sales are down 34% for the year and figure to keep falling throughout ’08. “It will be a difficult year,” said one homebuilder CEO, who plans to “pare down inventories in virtually all our markets.”