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Economy in Brief

U.S. New Home Sales Fall But Home Prices Collapse
by Tom Moeller   November 24, 2010

Weakness in the housing market was reinforced with this month's readings. Yesterday, the figures on sales of existing single-family homes slipped. Today's reading indicated that sales of new homes collapsed. The 8.1% decline to 282,000 nearly reversed all of September's gain from the series' low. Sales in the Western region of the country were the weakest. They fell 23.9% from September and were down nearly one-half from last year. Sales in the Midwest also fell 20.4% (-27.8% y/y) while sales in the Northeast were up merely 12.1% (-12.1% y/y). Only sales in the South showed any strength with a 3.1% increase but they still were off roughly one-quarter from last year. 

Emphasizing the message of weakness was the 13.9% m/m collapse in the median price of a new home to $194,900. The latest was the lowest since late-2003 (no typo). The lesser 8.0% decline in the average sales price of a new home indicates that sale prices of expensive homes held up (or they just stayed on the market). Nevertheless, the price of $248,200 also was the lowest since late-2003.

At the current sales rate, the months' supply of unsold homes rose back to 8.6; however, the latest remained well below the early-2009 high of 12.1 months. The inventory of unsold homes was down 16.5% from 12 months ago. It was off roughly two-thirds from the 2006 peak and stood at its lowest since 1968. The data in this report are available in Haver's USECON database.

US New Homes Oct Sep Aug Y/Y % 2009 2008 2007
Total Sales (SAAR, 000s) 283 308 275 -28.5 372 481 769
Northeast 29 33 28 -12.1 32 35 64
Midwest 39 49 32 -27.8 54 69 118
South 164 159 150 -23.0 201 264 409
West 51 67 65 -46.9 87 113 178
Median Price (NSA, $) 194,900 226,300 223,200 -9.4 214,500 230,408 243,742
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