Sales for new homes just barely declined in March, slipping 0.6% to a seasonally adjusted pace of 356,000, according to numbers released today by the U.S. Census Bureau. On an annual basis, that represents a 30.6% drop in sales activity.
But the relatively small monthly decline gives some hope to economists and others. “We believe that the bottom is at hand and that sales will begin turning in the second half of this year,” Patrick Newport, chief economist for research firm IHS Global Insight, said in a statement analyzing today’s numbers. But, he noted, “we are hardly going out on a limb in making this projection. As previous recessions show, demand for new homes does not evaporate altogether, even in the hardest of times. Moreover, sales remain near record lows.”
And those sales are taking longer and longer to happen. The median number of months for sale rose to 10.2 in March, according to the Census. In comparison, that figure was 9.2 months in 2008 and 6.2 months in 2007, illustrating how builders are carrying new homes for longer and longer, despite a decline in the total amount of new-home inventory. At the end of March, there were just 311,000 new homes for sale in the country, a 33.7% drop compared to the same month a year ago.
At the current sales pace, that translates into 10.7 months worth of new-home supply.
Prices declined 3.5% to a median of $201,400 nationally.
Alison Rice is senior editor, online, at BUILDER magazine.