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NEW HOME SALES DECLINE IN NOVEMBER

 WASHINGTON, Dec. 30 /PRNewswire/ -- New home sales dropped 8.3 percent in November to a seasonally adjusted annual rate of 565,000, the Commerce Department reported today.
 However, it is unlikely that the drop in reported sales signals an impending decline in the housing market.
 "While we view any decrease in sales with concern," said Robert "Jay" Buchert, president of the National Association of Home Builders, "we should be cautious in interpreting these numbers. Other housing market indicators -- including our monthly survey of builders -- are positive, and the numbers released today probably understate actual home sales. The Commerce Department has revised its new home sales numbers upward every month since August of 1991, and we expect that the November total will be revised upward as well."
 Regionally, sales were up 28.1 percent in the Northeast in November and were unchanged in the Midwest. They declined 18.5 percent in the South and 9.1 percent in the West.
 A fundamental shift in the way that builders operate is responsible for the under-reporting of sales and monthly upward revisions, Buchert added.
 "The credit crunch in housing production lending has made it virtually impossible for builders to get loans to construct new homes unless the homes are pre-sold. At present, the Commerce Department is underestimating the number of homes sold on contract before building permits are issued, and this is causing the preliminary estimates of new home sales to be unrealistically low," he said.
 Buchert added that the Commerce Department is aware of the problem and intends to revise its methodology beginning with the January 1993 report so that the preliminary new home sales numbers reflect market conditions more accurately.
 And despite the reported decline in November, Buchert said he expects new home sales for the entire year to be right on target with NAHB's forecast. "NAHB forecast about 600,000 new home sales for 1992 and I think we will end the year with just over 600,000," he said. "That's an 18 percent increase over last year's dismal showing of 509,000 new home sales."
 Although Buchert challenged the accuracy of the new home sales totals, he said it is still important to monitor the housing market closely and that Congress and the incoming Clinton administration should seriously consider measures to boost housing's performance as part of an overall economic stimulus package.
 "There is still a great deal of pent-up demand for housing, and with the nation beginning to emerge from recession, boosting new home production would provide valuable economic stimulus by creating additional jobs and demand for a wide range of goods and services," he added.
 -0- 12/30/92
 /CONTACT: Jay Shackford of the National Association of Home Builders, 202-822-0406/


CO: National Association of Home Builders ST: District of Columbia IN: CST SU: ECO

DC -- DC008 -- 0646 12/30/92 14:23 EST
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Publication:PR Newswire
Date:Dec 30, 1992
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