New Home Sales: Lowest Reading Since 1995

Here are some highlights from the New Home Sales data:

• February 2008 saw a drop of 1.8% from January 2008 (±15.0%) in terms of seasonally adjusted, annualized data; this was not a statistically significant number, given the margin of error.

• Year-over-year, the drop was 29.8% below the February 2007 data (±9.6% means this is significantly significant).

• Sales have fallen four months in a row.

• The median and average sales price of new houses in February 2008 was $244,100 and $296,400 respectively. Median sales price fell 2.7% in the past year to $244,100.

• Sales of new homes in the United States fell to a 13-year low.

• Sales figures are overstated due to the omission of the "ballooning number of sales that have been cancelled."

• February's supply of new homes on the market hit a 27-year high; inventories are likely understated, also because of cancellations.

• The pace of sales has slowed; inventory represented a 9.8-month supply at the February sales rate, unchanged from January and the highest since 1981.

• The number of completed homes for sale fell for the second straight month, standing at 188,000 after peaking in December at 197,000.

• A few pieces of encouraging data: The number of homes on the market dropped by 2.1% to 471,000, the lowest since July 2005. Also, sales in January and December were revised modestly higher.

Check out the two charts below: I particularly like the cool chart from Brian Jacobs, pricing Median Home Prices in terms of Gold (ounces):

Courtesy of Barron's Econoday

Sources:
NEW RESIDENTIAL SALES IN FEBRUARY 2008 (pdf)
Commerce Dept, March 26, 2008

New-home sales fall to 13-year low
Rex Nutting
MarketWatch, 10:53 a.m. EDT March 26, 2008

Comments

[ponchovilla]

Barry: I agree with the direction of home prices as moving down and a problem for the economy. But look at the charts in the link
www.realestateabc.com/...
They tell the same story across most pricing brackets. So when a headline shows median or average price what does that mean other that the dream has turned into a nightmare? It's no wonder there is so much spin on the numbers.
By the way I think you did well on the Kudlow Klown show. There wasn't much shouting or background noise blurting out your contribution.