Wall Street is trading up nicely today, in part due to the news that new home sales made a big jump last month.The sales figures for February are a welcome relief after we saw January hit a record low. During February, however, new home sales did pick up, and gained 4.7% during the month. While we have to keep in mind that February sales do rank second worst on record, it is encouraging to see things move in the right direction.
With last month's jump, we see the adjusted annual rate for sales move up to 337,000. This is up from January's annual rate of 322,00.
There is no question that we are still far from being out of the woods with the ailing real estate market. February's sales figures were 40% lower than the same period last year, and the median price for a new home made a record-setting 18% drop from the same period last year. What we can look to as a positive is that people are starting to gain interest in picking up some properties that were unaffordable just a year ago. The average price for a new home in February was $209,000.
A big consequence of the massive foreclosures that the market has been dealing with is the jump in home inventories. The build up hits everyone, from lowering personal home value, to applying even greater downside pressure on home builders to lower prices and take profit hits. The current viewpoint of the government is that it will take at least 12 months before we can eliminate the excess inventory of new homes on the market.
So, still a long way to go before we can feel too confident with the housing market, but at least we are seeing some positive signs that things may be heading in the right direction.
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