U.S. New Home Sales Plunge to Record Low

Arjun Dave
23 Mar, 2011
New York City

New home sales in February dropped to the lowest level in February and median price dropped to $202,100, the lowest since December 2003. New home sales rate decreased 16.9% to 250,000 and sales plunged 57% in the Northeast region.

[R]11:20 AM Miami – New home sales in February dropped to the lowest level in February and median price dropped to $202,100, the lowest since December 2003. New home sales rate decreased 16.9% to 250,000 and sales plunged 57% in the Northeast region.[/R]

The latest data on new home sales surprised the market and home builders declined.

Seasonally adjusted new home sales in February decreased 16.9% to 250,000 and decreased 28.0% from a year ago.

The data released by the Commerce Department today surprised many economists who were looking for an increase in new home sales.

The median sale price of new homes sold in the month was $202,100 and average price was $246,000 with nine months of inventory. The median price a year ago month was $221,900 and in January was $196,000, the record low since December 2003.

The number of new homes in the market in February was the same as in January of 186,000.

Home builders are struggling with the sale of foreclosed properties and sold at a discount to their mortgage values by the banks.

New home sales rate in January were revised higher to 301,000 from the previous estimate of 284,000 annual rate.

Sale of new homes declined to a record low in three of four regions tracked by the Commerce Department.

Northeast sales plunged 57%, Midwest sales declined 28% and sales in the West dropped 15%.

U.S. Commerce Department last week said that new home construction declined the most in nearly 27 years in February and an index of home prices in large 20 metropolitan areas indicated price weakness.

Week ago Commerce Department data showed that housing starts plunged to 479,000 annual rate in February and construction permit dropped to record low since record keeping began.

Home Resale Declined 9.6% in February

Earlier in the week the realtors association indicated a sharp decline in home resale.

Seasonally adjusted annual rate for existing U.S. home sales in February decreased 9.6% to 4.88 million from upwardly revised 5.40 million units in January.

Home sales declined 2.8% from a year ago of 5.02 million units rate in the month, according to the latest data reported by the National Association of Realtors.

The median home price declined 5.2% from a year ago to $156,100 to the lowest last seen in April 2002. The median home price in January fell was $157,900.

The inventory of unsold homes at the end of February increased to 3.5% to 3.49 million homes, representing 8.6-month supply at the current annual sales rate.

The sale of distressed properties sales are increasingly affecting the resale market and these homes including short sales and in foreclosures are now 39% of sales in the month.

Toll Brothers ((TOL)) fell 29 cents to $20.20 and D.R. Horton ((DHI)) edged 6 cents lower to $11.79. PulteGroup Inc ((PHM)) gained 0.2% and Lennar Corp ((LEN)) increased 2%.