U.S. housing market takes more sales hits

The U.S. housing market got a double-barrelled blast of bad news Tuesday as sales of new and existing homes had big tumbles last month.

The U.S. National Association of Realtors reported that sales of existing homes for November fell by 8.6 per cent to an annual rate of 4.49 million, down from October's 4.91 million units.

Economists had been expecting November's annual rate to come in at 4.9 million units, according to Thomson Reuters.

With falling sales, existing home prices also retreated, dropping by 13.2 per cent last month to a median of $181,300 US. Prices have not been that low since February 2004, and the November drop was the biggest year-over-year plunge since recordkeeping began in 1968.

The second piece of bad news came as the U.S. Commerce Department said new home sales last month came in at their weakest pace in almost 18 year.

The U.S. government said new home sales dropped by 2.9 per cent to a seasonally adjusted annual pace of 407,000 units. That was the weakest pace since January 1991.

Median prices for new homes also fell year over year by 11.5 per cent to $220,400 US. The drop was the largest since March of this year.

The U.S. housing market has been battered by rising defaults and foreclosures, and falling prices and sales, stemming from the subprime mortgage crash and the plunge in the U.S. economy.