New Home Sales Disappoint, Dropping 2.2%

by devteam January 26th, 2012 | Share

New home sales declined by 2.2 percentrnto a seasonally adjusted annual rate of 307,000 units in December according torndata jointly released by the U.S. Census Bureau and the Department of Housingrnand Urban Development.  November salesrnwere revised down from the original estimate of 315,000 to 314,000.  The recent sale pace was 7.3 percent lowerrnthan the 331,000 reported in December 2010. </p

The non-seasonally adjusted median homernprice in December was $210,300 and the average price was $266,000.  One year earlier the respective prices werern$241,200 and $291,700.</p

There were 157,000 new homes for sale atrnthe end of December compared to 158,000 at the end of November and 190,000 inrnDecember 2010.   The median time thernhomes have been on the market is 6.7 months, down from 7.3 months in Novemberrnand 7.9 months a year ago.  Homes availablernfor sale represent a 6.1 month supply at the current pace of sales, up from 6.0rnmonths in November and down from 6.9 months in December 2010.</p

New Home Sales Data
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Lou Brien, market strategist for DRWrnTrading Group in Chicago said of the new home sales report, “It certainlyrnmissed expectations and notably it missed expectations on sales even though thernmedian price fell $5,000 from November and is down $31,000 from last December.rnBut in the bigger picture we’re bouncing along. rnIt’s not necessarily deteriorating anymore but that’s not good at thisrnsales rate.”</p

He said that some recent housing datarnhas been better than expectations, but he pointed to the recent revision of fivernyears of sales data by the National Association of Realtors®.  “With this data coming in a little bit worsernthan expected it may have a little bit more of an effect on the market than ifrnthe other data had just been sort of static.”</p

William Larkin, Portfolio Manager, CabotrnMoney Management in Salem, Massachusetts said that while sales were lower, theyrnseem stable.  “From the standpoint of anrninvestor, the box has been checked, this is a neutral number. Not good, but notrnalarming. This is secondary on everyone’s radar today, as everyone is lookingrninto the sales figures in all the earnings reports.”</p

David Sloan, Economist, IFR Economics, a unit of Thomson Reuters said the 307,000rnsales pace was well below a consensus estimate of 320,000.  “The data comes as a disappointment with mostrnrecent housing indicators having been positive. While the balance of evidence remainsrnthat the housing sector is seeing some response to low mortgage rates, thisrndata serves as a reminder that the sector is still weak and we cannot yet bernconfident of a strong and sustained boost to GDP from housing in 2012. Pricesrnwere mixed on the month, but sharply negative year/year data shows that thernpicture is on balance negative.”</p<prnrnrnrnrnrnrnrnrnrnrn

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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