U.S. new home sales fell to a seasonally adjusted, annualized pace of 590,000 in February 2008 -- a 13-year low, the U.S. Commerce Department announced Wednesday (click here for the pdf).
Economists surveyed by Bloomberg News had expected February 2008 new home sales to register a 575,000 annualized rate.
Sales have now declined for four consecutive months, and are down about 30% in the last 12 months.
Meanwhile, January 2008 sales were revised up slightly, to 601,000 from the earlier released 588,000.
The number of homes on the market declined 2.1% to 471,000, the lowest level since July 2005. Also, the median sales price fell 2.7% in February 2008 to $244,100.
Regional sales data
Sales fell in the Northeast, down 40%, and the Midwest, down 6.4%. Sales rose in South, up 4.7%, and the West, up 0.7%.
Meanwhile, inventories remained constant at a 9.8-month supply at the February 2008 sales rate. However, inventories are at their highest level since 1981.
Many economists and analysts expect new home sales to continue to decline in 2008, as home builders reduce construction, due to anemic U.S. economic growth, sluggish new household formation, and more rigorous mortgage approval requirements, among other factors. Analysts also say the U.S. new home sector may incur a corrective period as long as two to three years -- lasting through perhaps the end of 2009 -- to compensate for substantial, speculative overbuilding in selected regions of the country during the housing boom.
Housing Sector Analysis: This is another negative data point for the U.S. housing sector. Demand remains very weak, which guarantees that housing will remain a contraction force in the U.S. economy through at least Q3 2008, and probably longer. The 2.7% decline in the median home price is also another tell-tale sign of soft home buyer traffic. When the median home price stabilizes for at least three consecutive months, that's a sign that housing demand is on the rebound. However, that moment, at this stage of the housing cycle, is nowhere in sight.
Comfort Zone Investing: Keep your recovery expectations real
Will Americans have to slim down to fit into their cars?
Starbucks: The next McDonald's
Reader Comments (Page 1 of 1)
3-26-2008 @ 3:11PM
william lindblad said...
The market did think this to be too bad. The NAR thought it was Ok, but than again, that's their business and it's always OK. Funny, not too many people really put too much stock in their reports.
Getting back to what you have written - yes it's still slow and there are no rainbows on the horizon. Look beneath the carpet on this subject for there is something unseen there and I have yet to see anyone even mention it. Therefore, it is either a subject that is a "no mention", or it has been simply missed. I go with the former - it's out there and its at least suspected.