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Economy in Brief

U.S. New Home Sales Gain Limited By Heavy Snowfall
byTom Moeller   January 26, 2011

Home sales last month likely were affected by the weather. Total new home sales in December rose 17.5% m/m to 329,000 SAAR from 280,000 in November, revised from 290,000. Consensus expectations were for 299,000 sales. The rise in sales was concentrated, however, in the Western region of the country suggesting a strong effect from record snowfalls after Christmas, notably in the Northeast and Midwest. Sales in the West rose by nearly three-quarters m/m to 110,000, the highest level since July, 2008. Elsewhere, sales were little-changed. In the Northeast sales slipped 5.0% to 19,000 for the third consecutive monthly decline. In the Midwest sales inched up 3.2% to 32,000. Sales in the South rose 1.8% to 168,000, the third increase in four months.

For the 2010 as a whole, new home sales fell 14.2% to 321,000, the fourth consecutive annual decline to another record low. Sales have fallen by three-quarters from the all-time record 1,279,000 in 2005.

Despite the sales weakness last month, the median price of a new single family home rose 12.1% to $241,000, the highest since April 2008. For the year as a whole prices rose 2.9% to an average $220,708 following two consecutive years of decline. Since the monthly peak in January 2007, prices have fallen 8.0%.

Given the rise in home sales last month, the inventory of unsold homes fell to a 6.9 months supply versus the recent high of 9.1 in August. The latest also was nearly half the high in January 2009.

The data in this report are available in Haver's USECON database.

How Might the Fed's Large-Scale Asset Purchases Lower Long-Term Interest Rates? from the Federal Reserve Bank of Richmond is available here.

US New Home Sales Dec Nov Oct Y/Y % 2010 2009 2008
Total (SAAR, 000s) 329 280 280 -7.6 321 374 482
Northeast 19 20 30 -50.0 31 32 35
Midwest 32 31 40 -37.3 44 54 69
South 168 165 161 -8.7 173 201 265
West 110 64 49 32.5 74 87 113
Median Price (NSA, $) 241,500 215,500 201,600 8.5 220,708 214,500 230,408
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