Sales of new U.S. homes plunged unexpectedly in November to the lowest level since April, showing that the housing market's recovery will be uneven and heavily dependent on government assistance programs. The 11 percent drop from October's pace shows that consumers are hesitant following an extension of a deadline for first-time homebuyers to qualify for a tax credit. Sales of newly built single-family homes fell 11.3 percent last month to an annual rate of 355,000, the Commerce Department reported Wednesday. Analysts had expected an increase to 440,000 units. Sales data for new homes are a better indicator of future real-estate activity than data for sales of previously occupied homes; however, new-home sales are a smaller portion of the housing market. While buyers of existing homes were rushing to close deals by the end of November (to beat the government's original deadline) buyers of new homes knew early last month they could shop longer because the program had been extended by Congress. While sales of existing homes rose 7 percent in November, economists expect sales to decline during the winter months.
