New Home Sales Mark Record Low

Median price sinks to lowest point since December 2003

By Inman News, Wednesday, February 24, 2010

Sales of new single-family houses hit a record low in January. Sales reached a seasonally adjusted annual rate of 309,000 last month, according to a report released by the U.S. Census Bureau and the Department of Housing and Urban Development.

That’s about 6.1 percent below the previous record low of 329,000 in January 2009, and about 11.2 percent below the revised December rate of 348,000, according to the bureau’s historical data. The bureau’s records reach back to January 1963.

The non-seasonally adjusted rate of new homes sold also hit a record low of an estimated 21,000 units.

Regionally, every region but the Midwest saw a month-to-month sales drop, with sales in the Northeast falling an estimated 35.1 percent; sales in the West, fell an estimated 11.9 percent, and sales in the South fell an estimated 9.5 percent. Sales rose 2.1 percent in the Midwest.

Year-over-year sales dipped in every region but the West, falling an estimated 20 percent in the Northeast; sales in the South and Midwest fell an estimated 10.5 percent and 7.5 percent, respectively. The West saw an estimated 13.8 percent increase.

About 15,000, or about 71 percent, of the unadjusted rate of 21,000 homes sold were under $300,000.

The median home price for new single-family homes was $203,500 — the lowest monthly median since December of 2003, when it was $196,000. The price fell 2.4 percent year over year.

The average sales price was $254,500, a 3.7 percent increase from the same month last year, and the lowest monthly average since then, when it was $245,200.

There were a seasonally adjusted 234,000 single-family homes for sale in January, a 0.4 percent increase from December and a 34.1 percent decrease year-over-year.

That figure represents 9.1 months’ supply of inventory at the January sales pace, compared to a 12.4-month inventory in January 2009. A six-month supply is considered an equilibrium between a buyer’s and seller’s market with a greater supply indicating a buyer’s market.

These statistics are subject to sampling variability and sampling error, the bureau said. A transaction counts as a “sale” when a buyer pays a deposit or signs a sales agreement.