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Economy in Brief

US New Home Sales Off 57.7%, Midwest Sales Down 71.5%
by Tom Moeller February 27, 2008

During January new single family home sales fell 2.8% m/m to 588,000. The decline dropped sales to the lowest level since 1995 and they were down 57.7% since the peak in July of 2005. A sales rate of 600,000 was the Consensus expectation for last month and January sales were nearly one quarter below the 2007 average.

Reflecting the weakness in the auto industry, sales in the Midwest fell 7.6% m/m to a level 71.5% below the 2003 peak. In the West sales actually ticked up slightly m/m in January but remained down 67.4% from the 2005 peak.

December sales in the South fell by 2.4% and were 53.9% below the 2005 peak. Sales in the Northeast fell 10.3% m/m and were 50% below the 2004 monthly peak.

The median price for a new single family home fell again last month by 1.5%. That left prices down 17.7% from early 2007 peak.

The inventory of new homes for sale declined 2.2% last month and the supply of homes is off 15.9% from the 2005 peak.

The decline in the number of homes for sale continued to not keep pace with the drop in home sales. At the current low sales rate, the 9.9 months' supply of homes on the market was more than double the rate for all of 2005 and it was the highest since 1981.

Today's testimony by Federal Reserve Board Chairman Ben S. Bernanke can be found here.

US New Homes January December Y/Y 2007 2006 2005
Total Sales (SAAR, 000s) 588 605 -33.9% 773 1,049 1,279
Median Price (NSA, $) 216,000 219,200 -15.1% 242,383 243,067 234,208
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