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WASHINGTON (AP) — Fewer people bought new homes in December, making 2011 the worst sales year on record.
The Commerce Department said Thursday new-home sales fell last month to a seasonally adjusted annual pace of 307,000. The pace is less than half the 700,000 that economists say must be sold in a healthy economy.
About 302,000 homes were sold last year. That's less than the 323,000 sold in 2010, making 2011 the worst year on records dating back to 1963.
The median sales prices for new homes dropped in December to $210,300. Builders continued to slash price to stay competitive.
Still, sales of new homes rose in the final quarter of 2011, supporting other signs of a slow turnaround afoot in the depressed housing market.
Sales of previously occupied homes rose in December for a third straight month. Mortgage rates have never been lower. Homebuilders are slightly more hopeful because more people are saying they might consider buying this year. And home construction picked up in the final quarter of last year.
"Although this decline was unexpected, it does not change the story that housing has likely bottomed," said Jennifer H. Lee, senior economist at BMO Capital Markets.
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