Tuesday, March 25, 2014

New Home Sales Fall to 5-Month Low

Sales of new homes fell 3.3% in February to an annualized pace of 440,000 units. This pace is 1.1% slower than it was one year ago. Continuing cold temperatures along with a number of other factors, including rising mortgage rates and lack of inventories, combined to restrain sales.

Sales fell in three of the four regions surveyed. The Midwest was the exception to this, with sales rising 37% to a pace of 67,000 units per year. Compared with year-ago levels both the Northeast and West have seen strong declines, falling 34% and 28% respectively. The South has been the strongest, with sales up 20%. Finally the Midwest is nearly neutral, with sales up just 2% from the pace in February 2013.

The tight supply of new homes on the market loosened slightly in February. There were 189,000 new homes on the market, the most since December 2010. At the current pace of sales, this equates to 5.2 months’ supply, the most since September.

Read the Census release.

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