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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

New home sales set record

Associated Press

WASHINGTON — Sales of new homes rose to an all-time high in 2004, the fourth straight annual record. But activity in December barely budged after a big drop the previous month, suggesting the nation’s red-hot housing market may finally be cooling.

The Commerce Department reported that sales of new single-family homes climbed 8.9 percent for all of 2004 to a record high of 1.18 million, up from 1.09 million in 2003.

But sales rose a lower-than-expected 0.1 percent in December after having fallen by 13.1 percent in November.

Sales of both new homes and previously owned homes have set records for the past four years as home buyers have enjoyed the lowest mortgage rates in their working lifetimes, making housing one of the standout performers for the economy.

“We have had a tremendous success story in housing,” said David Seiders, chief economist at the National Association of Home Builders.

Economists credit the strength in housing over the past four years to the aggressive credit easing undertaken by the Federal Reserve in 2001 as it fought first to counteract the impact of the country’s first recession in a decade and then to stabilize the economy after the terrorist attacks of that September.