New Home Sales Hit Record Low, Again!
New homes sold at a seasonally adjusted annual rate of 308,000 a year in February, according to the Commerce Dept. That's down from 315,000 in January. It's also lower 354,000 in February 2009, twelve months before. If you remember, February of last year seemed like a terrible time for new home sales.
Back at the peak of the building boom, in October 2005, new homes sold at an annual rate of 1.4 million. That's more than four times the current rate.
Economists blame the snowstorms last month, which kept potential home buyers from shopping for houses. The new home sales report represents the rate of new signed contracts to buy homes -- it makes sense that terrible weather would keep potential buyers from taking their last look at a house before making an offer. Sales fell most steeply in the regions buried most deeply in snow: the Northeast saw drops of 20 percent, while Midwest sales slid by 18 percent. In contrast, sales fell by just 5 percent in the South and rose 21 percent in the West.
Of course, we can all remember a time when home buyers would have driven through a rain of fire to make an offer thousands of dollars above the asking price for their dream home. Now the opposite seems to be true: Even an $8,000 federal home-buyer tax credit that expires April 30 can't rouse potential home buyers from their cozy seat by the fire.
The good news is that home prices rose slightly, reflecting some confidence from buyers and sellers that the houses have value, even if few people are bidding. Median home prices rose to $220,500, about 6 percent from January and up more than 5 percent from the year before, according to the Commerce Dept.