Sales of new single-family houses plunged in February to the lowest annual rate on record since the census began compiling the data in 1963. With only 19,000 homes sold during the month, the nation's annual rate hit a dismal 250,000 units, according to statistics released today by the U.S. Census Bureau. The numbers reflect a drop of 16.9% from January’s revised rate and a 28.0% decline year over year.
While many factors are contributing to the weakness in new home sales, the sheer number of foreclosures on the market have made them an unusually dominant force. Distressed properties pushed the median price for an existing home down to $156,100 in February, a month in which distressed properties made up 39% of all existing-home sales, according to data from the National Association of Realtors. Meanwhile, the median price for a new home in February was $202,100—29.5% higher than a used one.
And February’s pricing was discounted. The median price for a new home fell 13.9% from January’s median of $230,600 and dropped 8.9% year over year.
Home builders are feeling the squeeze on both ends, notes Chris G. Christopher, senior principal economist at IHS Global Insight. “Prices and sales are falling. Inventory is increasing. And the rising commodity prices are hitting the residential construction industry especially hard, as if they didn’t have enough problems already,” he wrote in a statement today regarding the Census Bureau’s numbers.
While all areas of the country saw declines on both a monthly and yearly basis, the Northeast led the losses with a staggering 57.1% drop from January and a 50.0% decline from the previous year. The Northeast also had the lowest annual rate of any region, a sparse 15,000 units.
The Midwest saw the second-highest loss, falling 27.5% from January and down 40.8% year over year, to an annual rate of 29,000.
The West declined 14.7% on a monthly basis and 34.1% annually, to a rate of 58,000.
While the South also experienced declines—6.3% and 17.8% on a monthly and yearly basis, respectively—the region still sold more new homes than all other regions combined, reaching an annual rate of 148,000 units.
At the current sales rate, builders have an 8.9-month supply, a 20.3% gain from the previous month and 11.3% over where the stock stood the previous year.
Claire Easley is senior editor, online, at Builder.
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