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January 26, 2013

The Associated Press

A sign hangs in North Andover, Mass., where a house was under construction during December.

Sales of new homes cooled off during December

The Associated Press

WASHINGTON - Sales of new U.S. homes cooled off in December compared with November but for the entire year were the best since 2009.

The Commerce Department said Friday that new-home sales fell 7.3 percent last month to a seasonally adjusted annual rate of 369,000. That's down from November's rate of 398,000, which was the fastest in two years.

For the year, sales rose nearly 20 percent to 367,000. That's the most since 2009, although the increase is coming off the worst year for new-home sales since the government began keeping records in 1963.

However, sales are still below the 700,000 level that economists consider healthy.

The housing market began to recover last year, roughly five years after the housing bubble burst. Stable job gains and record-low mortgage rates encouraged more people to buy homes. Prices have been rising on a sustained basis. And builders started to increase construction of new homes, partly because the supply of homes had thinned to extremely low levels.

For December, new-home sales fell 29 percent in the Northeast, 11 percent in the West and roughly 8 percent in the South. Only the Midwest showed strength, with sales rising 21.3 percent.





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