New Home Sales Rise After Hitting Record Low
After dropping over 10 percent in January, new single-family home sales rebounded 4.7 percent in February to a seasonally adjusted annual rate of 337,000, according to data released Wednesday by the U.S. Department of Commerce. The upward movement in February's sales was the first nationwide increase since last July, and well above the 323,000 pace expected by economists surveyed by MarketWatch. Nonetheless, February's sales were still down 41.1 percent compared to the same time last year. January's revised pace of 322,000 new homes sold marked the lowest figure on the Commerce Department's books, which date back to 1963, while February's pace posted the second lowest level on record. The Midwest took the brunt of the hit, with sales declining 9.1 percent -- reaching their lowest level sine October 1982 -- while sales in the Northeast dropped by 3.2 percent. However, sales rose in two of four regions in February. The South experienced the biggest gain, showing an increase of 9.7 percent while sales in the West rose 6.6 percent. As of February, the months' supply of homes on market fell slightly to 12.2 months from 12.9 months in January -- still well above the 9.7 months supply in February of 2008. While February's sales data marked a favorable sign for the housing market, home prices continued to decline. The median price of a new home tumbled 18 percent in February from a year earlier to $200,900. The most activity in home sales occurred in the $150,000 to $199,999 price range, followed by homes priced between $200,000 and $299,999. Houses over $500,000 accounted for just five percent of home sales in February, indicating the demand for higher-end housing has slipped to near non-existence. Write to Kelly Curran at firstname.lastname@example.org. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.