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Just 302,000 new homes were sold in 2011, 6.2% below 2010 and the lowest number of annual sales since the government started tracking home sales in 1963.

In December, sales of single-family homes fell 2.2% month-over-month to an annual rate of 307,000, according to estimates released by the Census Bureau and the Department of Housing and Urban Development.

A consensus of experts from Briefing.com had forecast an annual rate of sales of 321,000 for December. The actual result was a 6.9% decline from 12 months earlier, when homes sold at a 329,000 annual rate.

The dismal report was a reversal of other recent housing market trends. Last week, the National Association of Realtors reported that existing-home sales rose for the third straight month in December and the Census Bureau said that construction of new homes had been gaining ground.

Pat Newport, an industry analyst with IHS Global Insight, did not put much stock in the December new-home sales report, however. "They’re not statistically significant," he said. "I think the other recent numbers, like on housing starts and permits, give a more accurate picture of the current trends in the market."

Construction gains late in the year indicate that the new home market is picking up, he said.

Still, he added, these are the lowest new home sales numbers for the nation as a whole and for three of the four regions ever recorded. Only the Midwest escaped notching a new a record low.

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The median home price for homes sold during December was $210,300 and there was a 6.1-month supply of homes at the current rate of sales.

Getting new home construction healthy again would help revitalize the economy. For every 100 homes built, 300 jobs are created, said David Crowe, chief economist for the National Association of Home Builders. "Half of those are on construction sites and the other half are people building appliances, cabinets, carpets and other goods for the home," he said.

He’s forecasting an 18% rise in new homes sales this year. Newport, of IHS Global, is predicting a slightly lower gain of about 15%. 

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The director of the International Monetary Fund said Monday that Europe needs a stronger financial firewall to stop the spread of debt contagion in the eurozone.

Speaking in Berlin, IMF chief Christine Lagarde supported a plan to fold the resources of the European Financial Stability Facility into its permanent replacement, known as the European Stability Mechanism, which has yet to be fully established.

The EFSF is valued at €440 billion, while the ESM is expected to have €500 billion in lending capacity. Combining the funds could result in a total firewall worth €1 trillion, according to eurozone officials.

The goal is to shield larger euro area economies from the debt crisis that has pushed Greece to the brink of default and resulted in bailouts for Ireland and Portugal.

"We need a larger firewall," said Lagarde. "Without it, countries like Italy and Spain, that are fundamentally able to repay their debts, could potentially be forced into a solvency crisis by abnormal financing costs."

European recovery? Wait till 2013 (at least)

Lagarde stressed that the ESM should be funded with "real tangible capital," as opposed to the loan guarantees that make up the EFSF.

The comments came as finance ministers from the 17 nations that use the euro currency, known as the Eurogroup, met to discuss ways to speed up implementation of the ESM. They are also expected to hash out the details of the fiscal pact European leaders proposed in December.

In addition to calling for a stronger firewall, Lagarde said eurozone officials need to do more to boost economic growth, which could include additional action by the European Central Bank.

Lagarde also said the eurozone needs to move toward greater "fiscal integration." She pointed to a number of options for "fiscal risk-sharing," including the creation of so-called euro bonds, an idea that has proved controversial.

She welcomed steps the ECB has taken so far, including a long-term lending program that has already pumped nearly €500 billion into the banking system payday loans in one hour.

"That has helped enormously," Lagarde said, adding that "there is a role for the ECB to play in terms of monetary policy."

European banks need to raise more capital, but they must do so in a way that will not cause credit conditions to contract, cautioned Lagarde.

She said governments with large deficits need to continue to tighten public finances, although she warned the aggressive budget cuts could increase the risk of a deeper recession. However, nations that are in better financial shape should contribute to the "common effort" by scaling back fiscal consolidation, she added.

World Bank warns on risk of global recession

Separately, Lagarde said the IMF will lower its growth forecasts for "many part of the world" when it releases an update to its World Economic Outlook early Tuesday.

She called on global policymakers to do what is necessary to prevent a deeper decline, saying last year’s economic problems were driven "by a lack of a collective determination to reach a cooperative solution."

"Now the world must find the political will to do what it knows must be done," she said.

While the debt crisis in Europe is the biggest threat, Lagarde also pointed to the challenges facing the U.S. economy.

"The United States, as the world’s largest economy and the center of the global financial system, has a special responsibility," she said.

Despite signs of a modest recovery, the U.S. economy remains hindered by high unemployment and a weak housing market.

In addition, U.S. policymakers need to get past the "partisan impasse" on how to reduce the nation’s long-term debts, without stifling economic growth, she said. 

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Prime Minister Mario Monti

Swiss (SNBN) National Bank President Philipp Hildebrand will today answer lawmaker questions in Bern as he seeks to end a discussion over controversial currency purchases by his wife.

Global markets rose on Friday as investors welcomed German Chancellor Angela Merkel’s call to enforce tighter government spending rules and a surprise drop in the U.S. unemployment rate.

In a closely scrutinized speech to Germany’s parliament, Merkel said the 17 nations that use the euro currency must move quickly to restore market confidence, changing EU treaties to make financial controls stricter and more binding.

She reiterated her objection to so-called eurobonds _ debt jointly backed by eurozone countries _ and warned that the debt crisis will take years, not months, to fix. But her call for long-term changes suggested a commitment to strengthen financial union between countries in the euro, something analysts have said is necessary to make sure the eurozone doesn’t break up.

Merkel and French President Nicolas Sarkozy are meeting Monday to discuss potential treaty changes. The talks will culminate in a Dec. 9 summit of EU leaders, where the proposals are expected to be debated and detailed.

Investors are hoping if eurozone governments agree to longer-term changes in the way they control their finances, the European Central Bank will agree to step up its interventions in the bond markets. Those interventions keep borrowing rates down for debt-troubled nations like Italy.

Whether the ECB will agree to step up its bond purchases is not clear, although its President Mario Draghi hinted Thursday that it was a possibility.

“Expectations have been growing that a ‘Grand Plan’ will be delivered next week,” said Frederik Ducrozet, analyst at Credit Agricole CIB.

European stocks rose, as did bonds for Italy and Spain. Britain’s FTSE 100 gained 1.1 percent to 5,548.87 while Germany’s DAX added 1.0 percent to 6,094.66. France’s CAC-40 climbed 1.4 percent to 3,172.22.

Italy’s 10-year bond yield was down to 6.52 percent, almost a full percentage lower than Wednesday, an indication investors have high hopes of next week’s talks to save the euro. Spain’s 10-year yield was down to 5.56 percent.

Wall Street also rose on the open _ the Dow Jones industrial average was up 0.8 percent at 12,111 while the Standard & Poor’s 500 rose 0.8 percent to 1,255 after the release of cautiously upbeat U.S. jobs data.

The U.S. government said the unemployment rate fell to 8.6 percent in November, the lowest in 2 1/2 years and better than economists’ expectations for an unchanged rate of 9 percent.

The world’s largest economy also added 120,000 jobs in November, while the previous two months were revised up to show another 72,000 more jobs were created _ the fourth straight month the government revised prior months higher.

Although the drop in the unemployment rate was unexpected, the increase in jobs was roughly as forecast by most analyst.

Earlier in Asia, Japan’s Nikkei 225 index rose 0.5 percent to end at 8,643.75, its highest closing in three weeks. Hong Kong’s Hang Seng rose 0.2 percent and Australia’s S&P/ASX 200 added 1.4 percent.

South Korea’s Kospi was marginally down and mainland Chinese shares also lost ground as investors cashed in on earlier gains. The benchmark Shanghai Composite Index lost 1 percent.

Markets continued to enjoy some momentum from Wednesday, when the U.S. Federal Reserve, European Central Bank, Bank of England and the central banks of Canada, Japan and Switzerland jointly made it easier for banks to borrow dollars.

The coordinated effort was meant to prevent Europe’s debt crisis from exploding into a global panic. Should a European bank fail or if a country default on its debt, investors fear it could result in a freeze-up in global lending like the one that occurred in 2008 when Lehman Brothers collapsed.

China’s central bank also acted to release money for lending and to shore up growth by lowering bank reserve levels for the first time in three years. The bank actions caused global stocks to rally Thursday.

Benchmark oil for January delivery was down 5 cents to $100.15 per barrel in electronic trading on the New York Mercantile Exchange on Friday. The contract lost 16 cents to end at $100.20 per barrel on the Nymex on Thursday.

In currency trading, the euro rose to $1.3478 from $1.3460 late Thursday in New York. The dollar rose to 77.93 yen from 77.76 yen.

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Italian Premier Silvio Berlusconi averted a government collapse and reached a deal with allies on emergency growth measures in time for an EU summit on saving the euro before political tensions erupted in a fist fight in parliament.

Berlusconi and Northern League leader Umberto Bossi reached a compromise on raising Italy’s retirement age in late-night parliament talks Tuesday _ a point of disagreement that had threatened Berlusconi’s leadership. His majority in parliament needs the support of the Northern League.

A fist fight in the Chamber of Deputies on Wednesday when League lawmakers briefly came to blows with colleagues loyal to a former Berlusconi ally Gianfranco Fini, the Chamber president who broke with the governing coalition early in its term. Scuffles are not rare in Italy’s parliament.

League deputies were incensed when Fini, on a TV talk show, mentioned that Bossi’s wife, took early retirement from a teaching job when she was 39.

Berlusconi will deliver a letter detailing the emergency measures to an EU summit. A spokesman said the contents are reserved for summit leaders, but Italian media reported the measures include new infrastructure spending, with a push for more private investment for strategic projects, the privatization of public entities and property and simplifying rules for companies.

Changes to Italy’s pension scheme had become a major sticking point, with Bossi’s party refusing to risk alienating its constituency of workers from the productive north.

Under the overnight deal, Italy will gradually raise the pension age for all workers to 67 by 2025, bringing it in line with European trends. Currently, Italian men retire at 65 along with women in the public sector but some women in the private sector retire earlier.

The 15-page letter also reportedly contains details of the euro54 billion ($75 billion) in austerity measures passed by lawmakers last month to balance Italy’s budget by 2013.

The European Union had asked for measures, with a clear calendar for implementation, to promote growth, raise the pension age and simplify civil legal proceedings to encourage foreign investment

Outgoing Bank of Italy governor Mario Draghi called the letter of intent “an important step … but now it’s time to implement the measures swiftly and concretely.” Draghi, who takes over helm of the European Central Bank on Nov. 1, also urged Berlusconi’s government to quickly activate the spending cuts and new taxes approved last month.

In Brussels, a spokesman for the European commission, Olivier Bailly, said the EU was “confident” it would have the letter by the end of the day.

Italy is seen as the next country at risk in the widening sovereign debt crisis, but with euro1.9 trillion ($2.6 trillion) in public debt, an Italian default would be disastrous for the global economy. The European Central Bank for months has been buying billions in Italian bonds to help keep borrowing costs down.

Nonetheless, Italy saw borrowing costs on short-term bonds spike Wednesday. The Italian Treasury sold euro8.5 billion ($11.83 billion) in six-month bonds at 3.53 percent, up sharply from last month’s 3.071 percent, its highest level in three years. Yields on two-year bonds rose to 4.628 percent from 4.511.

A Berlusconi spokesman, meanwhile, brushed off reports that Berlusconi was preparing to resign. The left-leaning La Repubblica newspaper, one of Berlusconi’s staunchest critics, reported that he had threatened to resign if no deal could be reached with the Northern League, which was persisting in its resistance to raising the retirement age.

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It wasn’t just the latest iPhone that drew people to Apple stores Friday.

Many consumers waited in lines for hours _ sometimes enduring chilly temperatures and overnight thunderstorms _ to remember Steve Jobs, Apple’s visionary who died last week.

The company’s first iPhone release since Jobs’ death turned into another tribute. Some customers even joked that the new model 4S stood “for Steve.”

Tony Medina, a student from Manhattan, stood outside Apple’s flagship store on New York’s Fifth Avenue for nine hours, waiting through rain. He had originally planned to order the phone online but decided to join a crowd of about 200 people to honor Jobs.

“For loyalty, I felt I had to do the line,” he said. “I had to say thank you.”

The new phone, which went on sale Friday in seven countries, is faster than the previous model and comes with better software and an improved camera. Yet the unveiling comes at a time when Apple is finding it difficult to maintain the excitement of previous iPhone introductions.

For starters, the phone is more widely available than in the past. In addition to Apple stores, it’s also sold by three wireless carriers: AT&T Inc., Sprint Nextel Corp. and Verizon Wireless. Some Best Buy, Target and Walmart stores also carry the phones, as do authorized resellers.

Buyers were also able to preorder the phone on Apple’s website and have it shipped to their homes or offices.

Many diehard Apple fans and investors were disappointed that Apple did not launch a more radically redesigned new model _ an iPhone 5. It’s been more than a year since Apple’s previous model was released.

That also may have contributed to smaller gatherings at some Apple locations.

“People are not as excited about this version as they might have been if a (iPhone) 5 came out,” said Charles Prosser, a retired teacher and computer technician from Tuscaloosa, Ala.

Even so, hundreds of buyers camped out in front of stores for hours to be among the first to get an iPhone 4S.

Steve Wozniak, who created Apple with Jobs in a Silicon Valley garage in 1976, was first in line at a store in Los Gatos, Calif., having arrived on his Segway the afternoon before.

Wozniak, who typically waits in line for new Apple products, said he barely slept Thursday night as he was busy chatting with Apple fans, taking photos and giving autographs. Wozniak pre-ordered two new iPhones. He bought two more Friday Payday advance.

“I just want to be part of an important event, so I feel it more deeply,” he said.

Many said the event resembled a remembrance to Jobs, who died a day after Apple Inc. announced the new phone.

Emily Smith, a Web designer, checked in to the line in New York on the location-centric social network Foursquare. She got a virtual Steve Jobs badge that read: “Here’s to the crazy ones. ThankYouSteve.”

In Chicago, Nicole Pacheco dragged her brother and a friend out to buy Apple’s latest gadget.

“I wanted to see how it was, to come out here for once,” she said as she looked at the line that stretched past her. “We’re kind of a memory for Steve Jobs. It’s one of his last inventions. It kind of motivated me to get the next one.”

Apple and phone companies started taking orders for the iPhone 4S last Friday. Apple said Monday that more than 1 million orders came in, breaking the record set by last year’s model, which was available in fewer countries and on fewer carriers.

Jobs’ death could be helping sales. Marketing experts say products designed by widely admired figures such as Jobs usually see an upsurge in sales after their death.

The base model of the iPhone 4S costs $199 in the U.S. with a two-year contract. It comes with 16 gigabytes of storage. Customers can get 32 gigabytes for $299 and 64 gigabytes for $399. The phones come in white or black.

The phones also debuted Friday in Australia, Canada, France, Germany, Japan and Britain. They are coming to 22 more countries by the end of the month.

Besides a better processor and camera, the new phone has a new operating system that allows users to sync content without needing a computer. It also includes a futuristic, voice-activated service that responds to spoken commands and questions such as “Do I need an umbrella today?”

The new features appealed to Dina Nguyen, who came to the Apple store in Palo Alto, Calif., the same location where Jobs was known to show up on sale days. She and her brother, Kennedy, picked up four iPhones for their family.

The siblings said it was a bit sentimental to get the phones now, right after Jobs’ death.

“He left a good legacy. He had a good life. He wanted to make people happy,” Kennedy Nguyen said. “It’s good to support that.”

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Libyan revolutionary forces claimed to have captured parts of a sprawling convention center that loyalists of Moammar Gadhafi have used as their main base in the ousted leader’s hometown and were shelling the city to try to rout snipers from rooftops in their offensive aimed at crushing this key bastion of the old regime.

The inability to take Sirte, the most important remaining stronghold of Gadhafi supporters, more than six weeks after the capital fell has stalled efforts by Libya’s new leaders to set a timeline for elections and move forward with a transition to democracy.

Gadhafi supporters also hold the enclave of Bani Walid, where revolutionary forces have been stymied by a challenging terrain. But the transitional leadership has said it will declare liberation after Sirte’s capture because that will mean it holds all of the seaports and harbors in the oil-rich Mediterranean coastal country.

British Defense Secretary Liam Fox pledged to keep up NATO airstrikes even after Sirte’s fall, saying the international military action would continue as long as the remnants of the regime pose a risk to the people of Libya.

“We have a message for those who are still fighting for Gadhafi that the game is over, you have been rejected by the people of Libya,” he told reporters Saturday in Tripoli before flying to Misrata.

Revolutionary forces began a major attack on Sirte on Friday after a three week siege from the outskirts of the coastal city, during which they said they were giving civilians time to flee. On Saturday, fighters fired rockets into the city from the backs of pickup trucks, though visibility was severely limited by a sandstorm.

Libya’s de facto leader, Mustafa Abdul-Jalil, the head of the governing National Transitional Council, said the battle for Sirte has been “ferocious,” with 15 revolutionary fighters killed and 180 wounded on Friday.

“Our fighters today are still dealing with the snipers positioned on the high buildings and we sustained heavy casualties,” he said at a joint news conference in Tripoli with Fox and Italian Defense Secretary Ignazio La Russa.

Abdel-Basit Haroun, a revolutionary field commander, said 32 people had been killed in two days of fighting, while the military council in the nearby city of Misrata, which has sent many fighters to Sirte, reported 80 wounded.

The council said revolutionary forces were attacking houses to try to eliminate the “overwhelming hordes of snipers out there.”

Sirte, 250 miles (400 kilometers) southeast of Tripoli, is key to the physical unity of the nation of some 6 million people, since it lies roughly in the center of the coastal plain where most Libyans live, blocking the easiest routes between east and west.

Mohammed al-Rajali, spokesman for the brigades attacking the city from the east, said the fighters have gained control of the Ouagadougou Convention Center, an ornate complex in the city center that Gadhafi frequently used for international summits. But they were meeting heavy resistance from villas behind the building so were focusing on firing artillery from the outskirts.

“After the intensive shelling, we will move forward,” he said.

A military spokesman in Tripoli, Abdul-Rahman Busin, and several commanders and fighters confirmed the center was under control of revolutionary forces.

“We have passed the area and we moved on to the residential area behind it,” brigade commander Musbah Alhadar said. “Our forces are camping around the center because the center itself has been destroyed by the NATO airstrikes and our artillery.”

Seizing the convention center complex, named after the capital of the West African nation of Burkino Faso, would be a significant gain for the attackers. Throughout the siege, Gadhafi fighters have used the walled complex as a base and stronghold. From there they were able to dominate surrounding neighborhoods and assault revolutionaries trying to enter Sirte.

Anti-Gadhafi forces also have surrounded the central Green Square and a presidential palace after fierce street fighting in the heart of the city.

Loyalist forces have been driven away from Ibn Sina Hospital where hundreds of civilians have sought refuge from the fighting, according to another commander, Suleiman Ali.

NATO warplanes flew overhead but no strikes were immediately reported.

Abdul-Jalil, meanwhile, called on the international community to help Libyans treat the wounded, saying they could deduct the cost from Libyan assets that were frozen under Gadhafi’s regime.

The international community has rallied around Libya’s efforts to move forward with forming a new government, with transitional leaders promising elections within eight months after liberation is declared.

Fox announced 500,000 pounds ($775,000) and extra military expertise to help Libya prevent the proliferation of weapons, including portable missiles capable of shooting down aircraft.

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Italy pledged on Friday to work swiftly for a constitutional amendment requiring the government to balance its budget, as Rome feverishly tried to assure domestic and foreign investors its finances are sound and calm nervous markets in Europe.

Premier Silvio Berlusconi told a hastily convened evening news conference the government will “speed up measures” in its budget law approved last month by Parliament, “with the possibility of reaching a balanced budget by 2013 instead of 2014″ as first planned.

His conservative government, now more than three years into its five-year term, will also work to amend the Constitution to include a requirement for a balanced budget, Berlusconi said.

Berlusconi, saying he conferred by phone with world leaders, announced that G-7 finance ministers will meet “within days” about the exploding financial crisis.

Later, his spokesman clarified that convening an “extraordinary meeting” of the G-7 finance ministers was still “at the reflection stage” with no decision yet taken, although Italy favored one.

Concern over the crisis was trans-Atlantic.

“This evening I’ll receive a phone call from President (Barack) Obama” because the crisis “pertains to the global financial panorama,” Berlusconi said. German Chancellor Angela Merkel’s office also said she would be consulting with Obama later Friday.

Finance Minister Giulio Tremonti, who stood beside Berlusconi, said a balanced budget could be achieved by 2013 by speeding up reform of Italy’s extensive, and expensive, social welfare system, which includes national health care and generous retirement payments.

Also key to this goal, Tremonti said, would be what he promised as the “mother of all liberalization,” especially in Italy’s highly regulated world of labor.

“The principle that all will be allowed unless specifically forbidden” by labor laws will be the guiding principle of the government’s strategy, Berlusconi said.

Italy’s industrialists and mid-sized employers have complained for decades that Italy’s strict laws making firing workers almost impossible discourages them from hiring more employees in moments of need.

Further strategy also includes privatization of sectors, which Tremonti didn’t specify, and what he said would be a “speeding up” of investment to improve and modernize infrastructure, as a way to wake up Italy’s slumbering economy.

Italy’s Parliament went on vacation for a month earlier this week, but on Friday, responding to the quickly worsening economic nervousness, officials of the two chambers said key committees would keep working throughout August.

And all the lawmakers were expected to be summoned back to work as soon as the reforms pushed by Berlusconi is ready for a full vote.

Berlusconi’s coalition, despite setbacks this year in local elections, has a comfortable majority in parliament assuming his often fickle ally, the Northern League, closes ranks.

The opposition center-left has been clamoring for Berlusconi to step down, insisting he has essentially done nothing in three years to create jobs or lower the tax burden on workers.

Berlusconi’s pledges Friday night “are nothing new compared to the paucity of ideas shown by his government in recent months,” said Rosy Bindi, an opposition leader faxless payday advance.

Italy’s borrowing costs rose above Spain’s for the first time in more than a year, pushing European leaders to interrupt their vacations and look for a response to deepening fears about the health of the eurozone’s No. 3 economy.

At the start of Europe’s debt crisis 21 months ago, Italy was rarely grouped with the weaker members of the single currency zone, such as Greece, Ireland and Portugal. Many in the markets thought Spain, with its 20 percent unemployment rate, was vulnerable.

But the emergence of Italy as a potential victim over the past few weeks has highlighted just how vulnerable the eurozone is and how insufficient its anti-crisis measures are.

The yield on Italy’s 10-year bond stands at 6.09 percent, ahead of Spain’s equivalent of 6.04 percent _ though both are lower than the euro-era highs earlier in the week and markedly below where they were at the start of the day, they’re still not far from the levels that forced Greece, Ireland and Portugal to seek international financial help.

Worries that Italy and Spain maybe next in line led Merkel, vacationing in the Italian Alps, and French President Nicolas Sarkozy, on the French Riviera, to take time from their holidays for a phone conference on the eurozone crisis. Spanish Prime Minister Jose Luis Rodriguez Zapatero spoke with Sarkozy and Berlusconi in separate phone conversations Friday.

Merkel’s office said she spoke with Sarkozy, Berlusconi and British Prime Minister David Cameron.

All agreed that “decisions made by the EU summit on July 21 should be implemented quickly,” Merkel’s office said in a statement.

At last month’s huddle, eurozone leaders agreed to a sweeping deal that will grant Greece a new bailout _ but likely make it the first euro country to default _ and radically reshape the currency union’s rescue fund, allowing it to act pre-emptively when crises build up.

But their options to what a leading EU policymaker described as “incomprehensible” movements in the markets appear limited.

Even a better than expected U.S. jobs report Friday failed to ease the pessimism that has gripped investors over the past few weeks.

It’s only been two weeks since eurozone leaders agreed to expand the powers of its euro440 billion ($623 billion) rescue fund that helped bail out Greece, Ireland and Portugal. The fund will be able to buy governments bonds and bail out banks, but the new powers will not be in place until parliaments approve the changes in September.

Analysts also warn that the fund is currently not big enough to rescue Italy, whose debt amounts to 120 percent of economic output, around double that of Spain. Only Greece has a bigger proportion to service in the eurozone.

Markets have put increasing pressure on Italy because of its chronically weak growth and a general lack of confidence in Berlusconi’s ability or willingness to push through politically difficult measures to make the economy more productive.

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