Highlights
Existing home sales on Monday were a big positive surprise, offset unfortunately by a big negative surprise for today's report on new home sales. New home sales fell 14.7 percent in December to a record low 331,000 annual unit rate vs. a sharply downward revised 388,000 in November (407,000 first reported). Data for the two prior months were also revised lower. For the full year, new home sales totaled 482,000 units, the lowest level since 1982 and down 38 percent from 2007.

Details of the report offer more of the same. Supply on the market is at a record high of 12.9 months vs. 12.5 months in November. The median price for a new home plunged 6.0 percent from November to $206,500 and is down 9.3 percent from a year ago. Contraction in home prices, and its eroding effect on the integrity of the banking system, is perhaps the most dangerous factor for the economic outlook. Sales in the month showed contraction in all regions.

This report follows troubling reports on durable goods and jobless claims issued earlier this morning. Stocks moved lower in immediate reaction to the new home sales report.

Market Consensus Before Announcement
New home sales set a new low with sales down 2.9 percent in November to a 407,000 annual rate. The year-on-year rate is an abysmal minus 35.3 percent. Supply of new home sales remains extremely heavy, at 11.5 months for the third straight month over 11 months. The median price did firm in the latest month, rising 2.7 percent, and likely due to a faster drop off in low end sales. Home prices on a year-ago basis are down 11.5 percent.

New home sales Consensus Forecast for December 08: 400 thousand-unit annual rate
Range: 350 thousand to 410 thousand-unit annual rate

2009 Release Schedule

Released On: 1/29 2/26 3/25 4/24 5/28 6/24 7/27 8/26 9/25 10/28 11/25 12/23 Released For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov