Sales of new homes in the U.S. fell in November, approaching an 11-year low and signaling no end to the housing recession that’s threatening to stall growth in 2008, economists said before a report today.
Purchases fell to an annual pace of 717,000, according to the median forecast in a Bloomberg News survey of 68 economists, from 728,000 in October. The 716,000 pace reached in September was the lowest since 1996.
The residential real-estate slump, already the deepest in 16 years, shows no sign of ending as discounts fail to lure buyers and mounting foreclosures swell the glut of unsold properties. Falling property values may cause consumer spending to cool, boosting the odds the expansion will come to an end.
“The housing recession continues to grind away,” said Brian Bethune, U.S. economist at Global Insight Inc. in Lexington, Massachusetts. “Imbalances in the housing market overall are being exacerbated by a rising number of homes being reverted to the market due to foreclosures.”
Economists’ forecasts ranged from 685,000 to 750,000. The Commerce Department report is due at 10 a.m. in Washington.
The housing recession has deepened since the August turmoil in subprime mortgages led to a worldwide credit shortage. Stricter borrowing standards and a freeze on lending to borrowers with poor credit put mortgages out of reach for more potential buyers. That’s driving home prices lower, weakening sales as people hold out for even bigger reductions.
Sales of new houses will probably tumble 8.9 percent in 2008 after a 25 percent drop this year, according to a Dec. 13 forecast from Fannie Mae, the largest mortgage buyer. Sales of new homes in October were already down 48 percent from their July 2005 peak.