Housing sector figures robust

     Special to Real Estate
      The housing market remains robust, according to figures released Wednesday by the Commerce Department.
      New-home sales rocketed 7.6 percent higher in November to a record annual rate of 965,000 units. The department revised October figures to show an annual rate of 897,000 units instead of the 851,000 homes estimated -- that's a 6.4 percent advance, instead of the meager 0.8 percent previously reported. The figures are adjusted for seasonal factors.
      The National Association of Realtors recently reported existing-home sales rose 2.7 percent, and economists expected similar new-home sales, so the data released Wednesday surprised officials.
      The sales marked the 36th consecutive month in which monthly sales were greater than 700,000, tying the previous record set in the mid-1970s.
      There was a signal that other segments of the economy are not faring, as well, however. In a separate report Wednesday, the National Association of Purchasing Management said that its barometer of nonmanufacturing business activity slipped to 49.5 in December from 53 the month before. That put the service industry just below the 50-point watermark that indicates economic growth.
      While economic woes abroad have slowed some segments of the U.S. economy, the troubles have a been a boon for American consumers, who have enjoyed declining interest rates. The Federal Reserve lowered rates three times at the end of the year in order to relieve a credit crunch and stave off a recession.
      The rate on the average, 30-year, fixed-rate mortgage was 7.02 percent in November. And the stock market climbed back from its summer troubles to restore consumer confidence.
      Unseasonably warm weather contributed to the sales. Because seasonal adjustments assume a slowdown as winter hits, the new-home data probably was thrown off by the mild climes.
      The Commerce Department report said the inventory of new homes fell to a record low 3.7-month supply from four months. Despite all the activity, the median price for a new home fell to $148,700 from $150,000. Half of all homes sold sell for below the median price; half sell for more.
      Sales of new single-family homes surged 20.5 percent in the Northeast, increased 0.6 percent in the Midwest, gained 9.9 percent in the South and advanced 5.4 percent in the West.
      Meanwhile, the decline in the NAPM's nonmanufacturing survey marked the first time its business activity index has dropped below 50 since the survey's inception in July 1997. The NAPM's older, closely watched manufacturing index has been below 50 since June, while the service sector has weathered the Asian -- and then Russian and Brazilian -- financial storms with more resilience. Though the service sector makes up the far bigger portion of the U.S. economy, it is in many respects driven by demand for goods.
      "Overall in December, non-manufacturing industries' reported decreased business activity and reduced employment while experiencing lower levels of new orders. Concerns of purchasing executives in non-manufacturing industries in December include high inventory levels relative to current demand and a slowdown in business activity," Ralph G. Kauffman, who runs the survey for the NAPM, said in a prepared statement. Mr. Kauffman is coordinator of the purchasing-and-supply management program at the University of Houston-Downtown.
      The NAPM said that many members believe the December slowdown was because of seasonal factors. Indeed, one segment of its survey showed surprising strength; its new export orders index rose to 49 from 45, meaning the contraction slowed down.