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Economy in Brief

U.S. New Home Sales Form A Bottom While The Level of Unsold Homes Is At Its Lowest Since 2001
by Tom Moeller May 28, 2009

Sales of new single-family homes during April showed further signs of forming a bottom after having declined by more than three-quarters since 2005. Sales were stable at 352,000 units (AR) after a downwardly revised March decline. They have varied in a range of 329,000 to 362,000 so far this year. April sales fell short of Consensus expectations for 360,000 units.

Around the country sales patterns vary. Sales in Midwest were stable last month near their record low while sales in the Northeast also were stable at a new record low. Sales in the South picked up slightly as did sales out West.

The modest firming of home sales gave rise to an increase in the median price for a new single-family home. At $209,700 the figure was at its highest since November, however, that increase may be due to a usual seasonal gain. Since their peak early in 2007, new home prices have fallen by roughly one-quarter.

Price weakness has helped move the inventory of unsold homes. It's down by nearly one-half since the peak during 2006 and at the lowest level since 2001. In each of the country's regions, the inventory is down by roughly one-third just during the last year.The month's supply of new homes for sale also has started to drop, in April to the lowest level since last July. But there's more inventory to move with lower prices if sales remain low.

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

US New Homes April March Y/Y (%) 2008 2007 2006
Total Sales (SAAR, 000s) 352 351 -34.0 479 768 1,049
  Northeast 19 19  -52.5 35 64 64
  Midwest 45 45 -45.8 69 118 161
  South 212 206 -25.4 264 408 559
  West 76 79 -39.7 111 178 266
Median Price (NSA, $) 209,700 202,200 -14.9 230,408 243,742 243,067
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