Wednesday, April 25, 2007

New Home Sales Increase 2.6%

From Marketwatch:

Boosted by warmer weather in the Northeast and Midwest, sales of new homes increased by 2.6% in March to a seasonally adjusted annual rate of 858,000, the Commerce Department reported Wednesday.

Sales of new homes were off 23.5% compared with March 2006.

The inventory of unsold homes rose by 1,000 to 545,000 in March, representing a 7.8-month supply. The inventory is down 1.4% compared with a year earlier, the biggest year-over-year decline ever recorded.

The median sales price rose 6.4% year-over-year to $254,000, as luxury homes continued to increase their market share.

Here's a link to the report from the Census Bureau.

Looking at the numbers, one fact stands out. Sales of homes in the Northeast increased 50% from 48,000 to 72,000. This is the primary reason for the increase. The Midwest also saw an increase from 122,000 to 134,000, or an increase of 9.8%.

It looks as though the increases in the NE and MW were essentially delayed deals that buyers put off until the weather settled down.

Also looking at the numbers we continue to have inventory issues. While the months available for sale number decreased from 8.1 to 7.8, the total number of homes on the market increased 1,000. The year-over-year inventory change was a decrease of 1.4%. This is both good and bad news. It's good because it may indicate the massive inventory build has stopped. It's bad because a years worth of sales have not taken a large number of homes off the market, indicating a glut of new homes for sale may still exist.

I should add that Calculated Risk has an excellent summary up.