Mar 24, 2010 1:11 PM by Melissa Canone
WASHINGTON (AP) - Sales of new homes fell unexpectedly to the
lowest level on record in February as stormy winter weather kept
buyers on the sidelines. The weak results make clear the
difficulties facing the housing industry as it tries to recover
from the worst slump in decades.
The Commerce Department reported Wednesday that new home sales
fell 2.2 percent last month to a seasonally adjusted annual sales
pace of 308,000.
It was the fourth consecutive month of declines and the worst
showing on records dating to 1963. January's results, meanwhile,
were revised upward slightly to a pace of 315,000.
Economists surveyed by Thomson Reuters had expected February
sales would rise to an annual rate of 320,000.
Sales plummeted dramatically in parts of the country that were
hit with bad weather. In the Northeast, they fell 20 percent from a
month earlier. Midwestern sales fell 18 percent. Sales fell nearly
5 percent in the South but rose 21 percent in the West.
The new home sales report reflects signed contracts to purchase
homes rather than completed sales and thus gives economists a feel
for how many buyers were out shopping for new homes in a given
The number of new homes up for sale in February increased
slightly to 236,000. At the current sales pace, it would take more
than 9 months to exhaust that supply.
There was some positive news for builders as the median sales
price climbed on both a monthly and yearly basis. It rose to
$220,500, up more than 5 percent from a year earlier and up about 6
percent from January.
Home sales have been sluggish during the winter even though the
deadline for a tax credit for first-time home buyers was extended.
It had been set to expire on Nov. 30. The earlier deadline caused
sales to surge last fall.
Congress extended the deadline until April 30 and expanded it to
cover existing homeowners who move. But economists and real estate
agents say the extension has not had much of an impact on sales.
That also was reflected Tuesday when the National Association of
Realtors said sales of previously occupied homes dropped 0.6
percent in February to a seasonally adjusted annual rate of 5.02
Some homebuilders say their outlook is getting better, but the
recovery is not a strong one.
"A number of housing markets may be stabilizing or starting to
rebound, though we do not yet see, in many respects, a sustained
nationwide recovery," Jeffrey Mezger, president and chief
executive officer of KB Home, a major builder, said Tuesday as his
company reported a $55 million quarterly loss.