New-Home Sales Move Lower In January
|February 27, 2008|
In the latest evidence of the continuing contraction in housing markets, the U.S. Commerce Department reported today that sales of new single-family homes declined 2.8 percent in January to a seasonally adjusted annual rate of 588,000 units, the slowest pace since February of 1995. “While home builders are reporting some glimmers of buyer interest starting to develop, many consumers are still firmly planted on the fence, waiting for just the right incentive to make their move,” said Sandy Dunn, president of the National Association of Home Builders (NAHB) and a home builder from Point Pleasant, W.Va. “Clearly, now would be an ideal time for Congress to follow up on its recently enacted economic stimulus program by passing legislation such as a home buyer tax credit that would help push those who are on the edge of a home buying decision off that fence and into the home of their dreams. Such action would reduce the inventory of units on the market and help restore housing to its historic role as a primary engine of economic growth.” “Our latest surveys reveal that builders are seeing greater traffic of prospective buyers through their model homes than in previous months, yet this has yet to translate to any improvement in actual sales activity,” noted NAHB Chief Economist David Seiders. “It stands to reason that policy measures to stimulate housing demand could be a powerful force and help bring about a housing and economic recovery.” Three out of four regions posted lower new-home sales in January, with a 10.3 percent decline reported in the Northeast, a 7.6 percent decline reported in the Midwest and a 2.4 percent decline reported in the South. The West posted a 2.2 percent gain for the month, following a large decline in December. While the inventory of new homes for sale was down 2.2 percent to 482,000 units in January, the supply of units at the current sales pace edged up to 9.9 months, its highest level since April of 1982. The median length of time that completed homes were on the market was 6.7 months in January, up from 6.2 months in December and 4.8 months a year earlier.