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New-Home Sales Move Lower In January
February 27, 2008 - In the latest evidence
of the continuing contraction in housing markets, the U.S. Commerce Department
reported today that sales of new single-family homes declined 2.8 percent
in January to a seasonally adjusted annual rate of 588,000 units, the slowest
pace since February of 1995.
“While home builders are reporting some glimmers of buyer interest starting
to develop, many consumers are still firmly planted on the fence, waiting
for just the right incentive to make their move,” said Sandy Dunn, president
of the National Association of Home Builders (NAHB) and a home builder from
Point Pleasant, W.Va. “Clearly, now would be an ideal time for Congress to
follow up on its recently enacted economic stimulus program by passing legislation
such as a home buyer tax credit that would help push those who are on the
edge of a home buying decision off that fence and into the home of their
dreams. Such action would reduce the inventory of units on the market and
help restore housing to its historic role as a primary engine of economic
growth.”
“Our latest surveys reveal that builders are seeing greater traffic of prospective
buyers through their model homes than in previous months, yet this has yet
to translate to any improvement in actual sales activity,” noted NAHB Chief
Economist David Seiders. “It stands to reason that policy measures to stimulate
housing demand could be a powerful force and help bring about a housing and
economic recovery.”
Three out of four regions posted lower new-home sales in January, with a
10.3 percent decline reported in the Northeast, a 7.6 percent decline reported
in the Midwest and a 2.4 percent decline reported in the South. The West
posted a 2.2 percent gain for the month, following a large decline in December.
While the inventory of new homes for sale was down 2.2 percent to 482,000
units in January, the supply of units at the current sales pace edged up
to 9.9 months, its highest level since April of 1982.
The median length of time that completed homes were on the market was 6.7
months in January, up from 6.2 months in December and 4.8 months a year earlier.
(Source: nahb.org)
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