New-Home Sales Dismal In 2011, Could Improve In 2012


2011 was the worst home sales year on record, the Commerce Department said Thursday, though there are indicators that the market is starting to recover.

New-homes sales dropped to 307,000 in December, which economists say is less than half of the amount of homes that need to be sold in a healthy economy.

With fewer homes selling, prices have also plummeted. The median sales price for a new home dropped 2.5 percent to $210,300 in December.

Real estate reports released this week suggest that the housing market could improve in 2012, due to a combination of factors such as improved unemployment figures and low mortgage interest rates. Though a result of poor sales, lower house prices could also contribute to an improved housing market in 2012.

Freddie Mac's U.S. Economic and Housing Market Outlook survey, released Wednesday, says that sales are expected to increase from 2 to 5 percent year-over-year.

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