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 March 28, 2007

Sales of New Homes Drops for 2nd Month
Economists are beginning to second guess whether or not the housing market will experience a complete rebound this year as sales of new homes fall for the second consecutive month.
In a Commerce Department report, sales of new single-family homes dropped 3.9% during the month of February to a rate that is seasonally adjusted of 848,000 new homes. That figure reflects the slowest rate of sales in approximately 7 years. The February number follows a drop of 15.8% in January. That month experienced the greatest one-month decline in thirteen years.

The prices of new homes dropped to a median price point of $250,000. This price is down 0.3% from 2006. The inventory level of available new homes hit a total of 546,000 units. With inventory levels at this point, it would take over eight months to sell off. These inventory levels are the highest in the past sixteen years.

One part of this problem could be that buyers are currently being faced with more stringent credit policies combined with slower appreciation of home values, thus causing buyers to opt for less expensive previously owned properties.

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