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Economy in Brief

U.S. New Home Sales Fall Sharply
by Tom Moeller Deecember 23, 2009

Conflicting signals have been flashed regarding homes sales last month. In contrast to yesterday's report that existing home sales rose, today the Commerce Department reported that new home sales fell by 11.3% m/m to 355,000, the lowest level since April. Nevertheless, near term home sales should be helped by the recent extension of the Federal government's tax credit which now it is for all home buyers and not just first-time purchases. The November sales figure fell well short of Consensus expectations for 439,000 sales. 

Home prices firmed during November though the October figure was revised down. The median price of a new single-family home rose to $217,400 which was the highest level since May. The increase pared the y/y decline to 1.9% from its worst of -14.5% this past February. The average new home price of $280,300 was off 3.4% y/y.

Price discounts, higher sales and much lower housing starts have combined to lower the overhang of unsold homes by more than one-third y/y to the overhang lowest level since the early-1970s. The months' supply of unsold homes rose moderately to 7.9 months but remained down from the high of 12.4 months in January. The figure was the lowest since May 2007.

Recent Developments in Mortgage Finance from the Federal Reserve Bank of San Francisco can be found here

US New Homes November October September Y/Y 2008 2007 2006
Total Sales (SAAR, 000s) 355 400 393 -9.0% 481 769 1,049
  Northeast 29 30 36  -23.7 35 64 64
  Midwest 68 56 68 23.6 69 118 161
  South 179 227 196 -14.8 264 409 559
  West 79 87 93 -9.2 113 178 266
Median Price (NSA, $) 217,400 209,400 213,500  -1.9 230,408 243,742 243,067
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