Daily Real Estate News

New-Home Sales Down for 2nd Month Sales of new homes fell for the second consecutive month, prompting economists to wonder if a housing-market rebound is likely this year.The Commerce Department reported yesterday that sales of single-family homes fell 3.9 percent in February to a seasonally adjusted annual rate of 848,000 homes. That’s the slowest rate in nearly seven years. This decline followed a 15.8 percent decline in January, the largest single-month decline in 13 years.Prices also fell in February to a median new-home price of $250,000, down 0.3 percent from a year ago. The inventory of unsold homes reached 546,000 units. At that rate it will take 8.1 months to sell off the backlog. This is the longest sell-off period in 16 years.Patrick Newport, senior economist at Global Insight, called the housing market weak and said his research firm doesn’t believe the market will recover this year.Last week the NATIONAL ASSOCIATION OF REALTORS® reported a 3.9 percent month-over-month increase in sales of previously owned homes. Economists say the difference between new-home sales and existing-home sales could be due to a couple of factors. New home sales are calculated from contracts actually signed in February when the weather was cold, while existing home sales reflect purchase agreements signed in December and early January, when the weather was warm in most parts of the country.The reports also may reflect shifting home-buying habits. Faced with tighter credit and slowing price appreciation, more buyers may be choosing the less expensive previously owned homes rather than pricier new homes."In a down market, people aren't looking to get into the most expensive home," says Richard DeKaser, chief economist at National City Corp. in Cleveland.Source: The Associated Press, Martin Crutsinger (03/26/2007); and The Wall Street Journal, Michael Corkery (03/27/2007)-Home Sales Down for 2nd Month Sales of new homes fell for the second consecutive month, prompting economists to wonder if a housing-market rebound is likely this year.The Commerce Department reported yesterday that sales of single-family homes fell 3.9 percent in February to a seasonally adjusted annual rate of 848,000 homes. That’s the slowest rate in nearly seven years. This decline followed a 15.8 percent decline in January, the largest single-month decline in 13 years.Prices also fell in February to a median new-home price of $250,000, down 0.3 percent from a year ago. The inventory of unsold homes reached 546,000 units. At that rate it will take 8.1 months to sell off the backlog. This is the longest sell-off period in 16 years.Patrick Newport, senior economist at Global Insight, called the housing market weak and said his research firm doesn’t believe the market will recover this year.Last week the NATIONAL ASSOCIATION OF REALTORS® reported a 3.9 percent month-over-month increase in sales of previously owned homes. Economists say the difference between new-home sales and existing-home sales could be due to a couple of factors. New home sales are calculated from contracts actually signed in February when the weather was cold, while existing home sales reflect purchase agreements signed in December and early January, when the weather was warm in most parts of the country.The reports also may reflect shifting home-buying habits. Faced with tighter credit and slowing price appreciation, more buyers may be choosing the less expensive previously owned homes rather than pricier new homes."In a down market, people aren't looking to get into the most expensive home," says Richard DeKaser, chief economist at National City Corp. in Cleveland.


Source: The Associated Press, Martin Crutsinger (03/26/2007); and The Wall Street Journal, Michael Corkery (03/27/2007)