New Home Sales Hit 12-Year Low

Sales of new homes fell to a 12-year low in December, making 2007 the worst year on record for home sales. Economists had predicted November's numbers wouldn't get much worse; instead, sales decreased 4.7% to an annual rate of 604,000, reports Bloomberg. "We are in deep recession lows now in terms of new home sales and housing starts," says an economist.

In response to the Commerce Department numbers out today, homebuilders' stocks fell and the dollar continued its plunge. "The broader economy is very, very close to falling over the edge," said another economist. "The Fed really needs to think aggressively." The median price for a new home fell to $219,200 in December; the 10% drop from a year earlier was the greatest in 37 years. (More housing market stories.)