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Economy in Brief

U.S. New Home Sales Lowest Since 1963
by Tom Moeller February 26, 2009

Sales of new single-family homes during January fell again, to their lowest level in the series' history which dates back to 1963. They dropped 10.2% from December to 309,000 after a 9.5% December decline that was slightly shallower than reported last month. New home sales were off by half and down by three-quarters from their peak during July 2005. January sales even fell short of Consensus expectations for 325,000.

Sales declines around the country have been nothing but extreme beginning with a 59.9% twelve-month decline in the West. That is followed by the 50.9% shortfall in the Northeast. Somewhat lesser declines occurred in the South where sales fell 45.9% January-to-January and by 33.8% in the Midwest.

The median price for a new single-family home continued to fall severely. At $201,000, the figure was off 9.9% just from December's level which was upwardly revised. The 13.5% year-to-year decline represented the weakest twelve months since 1970 as homebuilders attempted to move inventory. In fact, that effort continued successful and the inventory of unsold homes is down by more than one-quarter during the last year to its lowest level since 2003. In each of the country's regions, the inventory is down by one-quarter to one-third during the last year.

The month's supply of new homes for sale, however, surged to a record 13.3 due to the abysmal sales rate.

The new home sales figures are available in Haver's USECON database.

The Affordability of Homeownership to Middle-Income Americans from the Federal Reserve Bank of Kansas City is available here.

US New Homes January December Y/Y (%) 2008 2007 2006
Total Sales (SAAR, 000s) 309 344 -48.2 479 768 1,049
  Northeast 27 24  -50.9 35 64 64
  Midwest 51 54 -33.8 69 118 161
  South 172 184 -45.9 264 408 559
  West 59 82 -59.9 111 178 266
Median Price (NSA, $) 201,100 223,200 -13.5 230,117 243,742 243,067
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