Here is the latest on new home sales. It comes after the existing home sales data surprised to the upside on Monday leaving investors with the hope of a housing bottom.
The National Association of Realtors said Monday that sales of existing homes grew 5.1 percent to an annual rate of 4.72 million last month, from 4.49 million units in January.
That was followed up by a similar number yesterday from the Commerce Dept. It showed new homes sales increase a by 4.7% in February.
From AP by Alan Zibel entitled: February new home sales rise unexpectedly
“New home sales rebounded unexpectedly last month, but were still the second-worst on record and remained well below last year’s levels, according to data released Wednesday.
The Commerce Department said sales rose 4.7 percent in February to a seasonally adjusted annual rate of 337,000 from an upwardly revised January figure of 322,000. Even after the revision to January’s sales results, the month remained the worst on records dating back to 1963.
Economists surveyed by Thomson Reuters had expected February sales to fall to a pace of 300,000 units.
February’s sales were still down by more than 40 percent from the same month a year earlier. The median sales price fell to $209,000, a record 18 percent drop from the same month last year. The median price is the midpoint, where half sell for more and half for less.
At the current sales pace, the government said it would take a year to exhaust the supply of new homes on the market. The glut of unsold homes and competition from deeply discounted foreclosed properties puts even more downward pressure on prices and on builders’ profits.
Fallout from the housing crisis is one of the biggest problems facing the country. It has played a central role in the U.S. recession, now in its second year. Foreclosures have spiked, financial companies have racked up multibillion-dollar losses and home builders like Pulte Homes Inc., D.R. Horton Inc. and Lennar Corp. have been clobbered.”
Of course, as with every housing number these days the headlines were much better the data beneath them.
In fact, it is important to note that even with these small seasonal increases in sales they still remain close to all time record lows. Moreover, prices continue to fall and inventory remains near an all time high.
That makes for an extremely tough supply and demand picture going forward-even with low interest rates.
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