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Posts Tagged ‘Single Family’

New Home Sales “Unexpectedly” Fall 2.2% To 302,000 Units, Lowest Since 1963

Wednesday, March 24th, 2010

New Home Sales Fell to a Fresh Record Low of 302,000 Units in February 2010, a decrease of 2.2%

In another distressing example of the weakness of the US economy, Reuters just reported that “New Home Sales Unexpectedly Fell in February”, declining another 2.2% in February 2010 to 302,000 units, a fourth straight month of declines and a fresh all-time low since records began in 1963:

Sales of newly built U.S. single-family homes fell for a fourth straight month to a record low in February, a government report showed on Wednesday, heightening fears of renewed weakness in the housing market.

The Commerce Department said sales fell 2.2 percent to a 308,000 unit annual rate from an upwardly revised 315,000 units in January.

Analysts polled by Reuters had expected new home sales to edge up to a 320,000 unit annual pace from January’s previously reported 309,000 units.

The data came on the heels of report on Tuesday showing existing home sales fell for a third straight month in February and a jump in the supply of houses on the market.

Sales have barely responded to the extension and expansion of a popular tax credit, which boosted purchases in the second half of 2009, raising concerns over the fragile housing market’s recovery just as a key pillar of support is being dismantled.

The vaunted crew of American “economists”, as polled by Reuters, “expected” a 3.6% increase, as noted by AP:

The Dow rallied to its highest level since September 2008 on Tuesday after the National Association of Realtors said a drop in sales of existing homes last month wasn’t as big as forecast. The housing market will be in focus again Wednesday when the Commerce Department reports on new home sales.

The housing report is expected to show that sales rose 3.6 percent to a seasonally adjusted annual rate of 320,000 last month, bouncing off a record low seen in January, according to economists polled by Thomson Reuters. The report is due out at 10 a.m. EDT.

A recovery in the sector has been slow and uneven. Reports showing improvement or stabilization in the housing market have regularly been met with buying on Wall Street, such as Tuesday’s big gains.

It appears the prognostication powers of the average American economist is falling fast and one could perhaps be better off guessing about the direction of the housing market than listening to the economists with the fancy PHD’s. One certainty is that the American housing market continues to spiral downward, despite the many interventions of the Obama Administration into the market, and the overall supply of housing on the market continues to rise because of foreclosures:

The number of new homes on the market last month increased 1.3 percent to 236,000 units. February’s weak sales pace left the supply of homes available for sale at 9.2 months’ worth, the highest since May, from 8.9 months in January.

All told, the housing market continues to look like a slow motion train wreck, with no end in sight.  With continued high unemployment leading to another surge in foreclosures, the housing market looks certain to continue to stumble until new job creation returns to the United States.  Considering the uncertainty and concern that many small and big business managers are feeling regarding the Democratic agenda in Washington, DC, the timing of any return of substantial job creation in this country is an open question.

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