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Housing sector dealt setback - NEW HOMES: Sales had been projected to rise in November. Instead, figures show a decrease of 11 percent.

Purchases of new homes in the United States unexpectedly fell last month, indicating a recovery from the worst housing slump since the Great Depression will be slow to develop.

Purchases dropped 11 percent to an annual pace of 355,000, lower than the lowest estimate of economists surveyed by Bloomberg News, figures from the Commerce Department showed Wednesday. The median sales price decreased 1.9 percent from November 2008.

The prospect that a government tax incentive would expire, combined with a 10 percent jobless rate and competition from foreclosed properties may have hurt builders. Last month's decrease signals a sustained recovery may be difficult to secure without additional assistance from policymakers.

"The tax credit put a Band-Aid over the housing problem and in October and November we ripped it off" as it was set to expire, said Mark Vitner, a senior economist at Wells Fargo Securities LLC. , who projected sales would fall   Read Full Article...