New-Home Sales in the U.S. Fell to 13-Year Low in February

[Purveyor]

Source: Bloomberg News

March 26 (Bloomberg) -- Sales of new homes in the U.S. fell to the lowest level in 13 years as tighter loan restrictions and the prospect of even lower prices kept buyers away.

Sales dropped 1.8 percent in line with forecasts to an annual pace of 590,000, the least since February 1995, the Commerce Department said today in Washington. January purchases were revised higher. The median price decreased 2.7 percent from a year earlier.

The decline in sales, now in its third year, has caused builders to slash construction and is hurting other parts of the economy as consumers and businesses have a harder time getting credit. A separate report showed orders to factories for durable goods unexpectedly dropped in February, led by the biggest decline ever in demand for machinery.

``The direction is still down,'' Anirvan Banerji, director of research at the Economic Cycle Research Institute in New York, said in an interview with Bloomberg Television. ``We are now in a recession. We are unfortunately past the tipping point, and that means we have further to go in terms of housing downside''



Read more: http://www.bloomberg.com/apps/news?pid=20601103&sid=am3T3LRU3MhY&refer=us

[gasperc]

1. ooh..13 years, that's bad luck

being here in Michigan, it'd be kinda nice for this worm to turn soon. Real Estate has been soft here since 2005, now it's down right bleak. I know people don't want to pay too much but there are lots of affordable good bargains out there. For those that are in a financial sound place, it is a good time to buy. I'm not begging for a spectacular turnaround here but for people to keep sitting on the sidelines because "they think things will go lower", who really knows what can happen when. Do your homework, check the comparables in the neighborhood, get a home inspection, be smart, you plan on being there awhile so even if things dip, they will reflate over 5 to 10 years.

[girl gone mad]

2. More here..

http://www.marketwatch.com/news/story/new-home-sales-fall-13-year-low/story.aspx?guid=%7B835A4DA2%2D7EE5%2D4BDE%2D8BF0%2D833399B1C2E2%7D

The sales figures likely overstate the number of sales, because they don't account for the ballooning number of sales that have been cancelled. The government's data are based on contracts signed, not sales closed.

The number of homes on the market dropped by 2.1% to 471,000, the lowest since July 2005. This indicates builders are trying to work off their bloated inventories of unsold homes.

However, the pace of sales has slowed even more. Inventory represented a 9.8-month supply at the February sales rate, unchanged from January and the highest since 1981.