Thursday, February 25, 2010

New Home Sales Drop

From Reuters:

The Commerce Department said on Wednesday sales of newly built single-family homes dropped 11.2 percent to an annual rate of 309,000 units, the lowest level since records started in 1963, from 348,000 units in December.

It was the third straight monthly drop and the largest percentage decline in a year. Analysts, who had expected a 360,000 unit pace, said bad weather was partly to blame and warned of more of the same for February.

"There is no doubt that January and February are going to be messy months for housing, given the severe weather conditions, but that does not take away from the fact that the housing sector has taken another big step back, even with government aid," said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto.

Let's go to the data:

This look more like a continuation of the bottom forming in New Homes sales. I described the situation like this a few weeks ago:

The pace of new home sales is still at the bottom. It rebounded a bit, but in reality the best way to describe the current pace of new home sales is "bumping along the bottom."

This is in line with new home construction whose chart is similar.