New home sales softened for the second straight month in December, falling well short of expectations as harsh weather and declining affordability turned potential buyers off.
According to a joint report from the Census Bureau and HUD, sales of new single-family homes ran at an estimated seasonally adjusted rate of 414,000 in December, a decline of 7.0 percent from November's downwardly revised rate of 445,000.
Year-over-year, new home sales in December were up 4.5 percent, the agencies estimate.
Despite the decline, new sales are said to have improved over the course of 2013. The government estimates a total of 428,000 new homes were sold last year, a 16.4 percent increase over 2012's 368,000 sales.
December's downslide may have been due partly to the icy weather, which is thought to have kept would-be homebuyers from making their move.
However, a more likely factor is the rise in median sales prices, which Census and HUD say rose to $270,200. The average new home sales price was $311,400, down more than $20,000.
Also figuring into the equation was a drop in new home stock, which was estimated at 171,000 at the end of the month--the third straight decline. (Even though supply was down, the drop in sales numbers pushed months' supply up to 5.0 months at the current rate.)
The Midwest was the only Census region to experience a monthly increase in new home sales. According to the government report, sales in the region grew 17.6 percent to a rate of 60,000.
In the South, new sales fell 7.3 percent month-over-month to a pace of 230,000, while they were down 8.8 percent in the West to 103,000. The Northeast posted the most precipitous drop: Sales there fell 36.4 percent to a rate of 21,000.