After reporting an unexpected drop in U.S. new home sales in the previous month, the Commerce Department released a report on Wednesday showing an even more substantial decrease in new home sales in the month of November.
The Commerce Department said new home sales plunged by 11.0 percent to an annual rate of 841,000 in November after sliding by 2.1 percent to a revised rate of 945,000 in October.
Economists had expected new home sales to dip by 0.4 percent to a rate of 995,000 from the 999,000 originally reported for the previous month.
Revised data showed new home sales dropped for the fourth consecutive month, hitting their lowest annual rate since June.
The much bigger than expected decrease was partly due to a steep drop in new home sales in the Midwest, which plunged by 43.3 percent to a rate of 59,000.
New home sales in the West also plummeted by 17.3 percent, while home sales in the Northeast and South slumped by 2.5 percent and 1.9 percent, respectively.
"New home sales were softer than expected in November and appear to be losing momentum as 2020 draws to a close," said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics. "Still, sales are on track for a gangbusters year, set to grow nearly 20% in 2020."
She added, "We expect some moderation in sales in 2021, but unmet demand and low mortgage rates will continue to support new home sales."
The report said the median sales price of new houses sold in November was $335,300, down 0.7 percent from $337,500 in October but up 2.2 percent from $328,000 in the same month a year ago.
The estimate of new houses for sale at the end of November was 286,000, representing 4.1 months of supply at the current sales rate. The months of supply is up from 3.6 months in October but down from 5.6 months a year ago.
On Tuesday, National Association of Realtors released a separate report showing existing home sales pulled back in November after moving sharply higher for five straight months.
NAR said existing home sales tumbled by 2.5 percent to an annual rate of 6.69 million in November after jumping by 4.4 percent to a revised rate of 6.86 million in October.
Economists had expected existing home sales to slump by 2.2 percent to a rate of 6.70 million from the 6.85 million originally reported for the previous month.
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