U.S. New-Home Sales Unexpectedly Fall to Lowest on Record

[Pale Blue Dot]

Source: Bloomberg

Purchases of new U.S. homes unexpectedly declined in February to the slowest pace on record and prices dropped to the lowest level since December 2003, adding to evidence the industry is floundering.

Sales decreased 16.9 percent to a 250,000 annual pace, figures from the Commerce Department showed today in Washington. Economists surveyed by Bloomberg News projected a gain to a 290,000 rate, according to the median estimate. The median price fell 8.9 percent from the same month in 2010.

Builders are struggling to compete with existing homes as foreclosures add to the overhang of unsold properties and drive down values. The figures underscore the Federal Reserve’s view that the housing market “continues to be depressed” even as the rest of the economy improves.

“We’ve got this tug of war going on where we’ve got this very weak housing sector and a manufacturing sector that’s doing fine,” said Brian Jones, an economist at Societe Generale in New York, whose 240,000 forecast was the lowest in the Bloomberg survey. “The new and existing home sales numbers were abysmal. You could say that part of it was attributable to unusually harsh weather.”

Read more: http://www.bloomberg.com/news/2011-03-23/u-s-new-home-sales-fell-in-february-to-record-low-250-000-rate.html

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To repeat the refrain, this is only "unexpected" if you have your head up your ass or you believe in fairies.

[xchrom]

1. Surprise Fairies at work again! Nt

[David__77]

2. Maybe now is *finally* the time to buy.

I've been waiting for a loooooong time.

[stubtoe]

5. I suspect this is an excellent time to buy.

You might not hit the market at the absolute bottom, but you will get a great rate and a good price.

[Chris_Texas]

23. I disagree.

[Dappleganger]

6. It's not.

Unless you absolutely have to buy, I would continue to wait.

[David__77]

8. That's my initial thought as well.

In my area, housing prices are still way out of line with median income, and unemployment is very high. There are a lot of downward pressures on price that will be in effect for a long time to come. What is for certain is that housing is not a good "investment." If one is going to keep it for a very long time, then it is possible to find a good deal in the mix at this point, but the overall situation isn't good.

[Dappleganger]

24. Same here...

the only thing is that our area is still in the "cheaper to buy than rent" category, although BOTH rates need to go down drastically to catch up with reality of our high unemployment and underemployment rates (NE FL).

[shanti]

22. i tried

to talk my sis out of buying her (first) home (she's 54) at this time, but she and her hubby made too much money last year and their tax liability was thru the roof, so they felt compelled to buy NOW. they did get a low interest rate tho.

[jtuck004]

10. That really depends on the market you are buying into and your own

goals.

There is a posting here which shows nearly 20% of Florida homes are vacant, 14% nationwide. California has about half a dozen foreclosures not listed behind every one on the MLS according to one site.

As long as you like the home, are sure you can sustain your income, and know that you may never be able to sell it for what you have in it, or maybe have to let it sit on the market for years even at a reduced price, then you might be comfortable.

Otherwise, proceed with caution. I know a lot of people don't think it can move substantially lower, but they have continued to think that all the time the market has been dropping.

[Tansy_Gold]

3. NO ONE COULD HAVE IMAGINED!!

yeah, right.

[plumbob]

4. Head up your ass, believe in fairies, AND have your ears plugged shut!

THEN you might be surprised!

[n2doc]

7. Drive wages down to pre 2000's levels and houses follow. What a surprise. n/t

[xiamiam]

9. ineffective mortgage mod program will see prices go down further

as millions more lost their homes..

[BR_Parkway]

11. The only surprise should have been that any new homes sold at all

with the inventory levels and distressed pricing.

I want a job where I can constantly be "surprised" that I'm wrong month after month and keep drawing a paycheck. I swear the economists have made weathermen look "unexpectedly" accurate

[bemildred]

12. I expected it, but I guess that does not count in TV land. nt

[Lucky Luciano]

13. They expected 290K which is an awful number as well.

They did not expect it to be this awful.

Funny how people never comment about how stupid the economists are when the numbers come in better than expected.

To repeat: economists expected an awful number just like all the brilliant top tier DU armchair economists, but they were off on the exact number.

[Locrian]

14. buy / sell

>>>ou might not hit the market at the absolute bottom, but you will get a great rate and a good price.

Unless you also have to SELL yours......

[Name removed]

15. Deleted message

Message removed by moderator. Click here to review the message board rules.

[bluestateguy]

16. I'm sick of hearing about the housing market

The doomers and gloomers got their fix for today. Enjoy.

If the data had shown a rapid rebound, then these same people would be pissing and moaning about speculation and another McMansion bubble.

They have their talking points all set up either way.

[w4rma]

19. It is just a market correction. And the market will continue to correct itself downward as long as

wages and salaries are stagnant and newly created jobs are part-time or worse.

So to all the economists and especially the policy makers, you people need to quit lying to yourselves and/or everyone and start expecting the housing market to continue to drop until good jobs with good salaries are the norm again.

[OhioChick]

17. Love "your" comment....so true!

K&R

[PurityOfEssence]

18. I have my head up my ass and personally know many fairies, and even I expected this

It's not really a cluefull world around those parts, is it?

[bluedigger]

20. Makes sense to me.

Given the excess capacity in the housing market, it is likely that the pre-owned housing market would take sales from new housing. Generally speaking, most new housing is in subdivisions at the outskirts of built-up areas. The used market is going to have more units in better locations at a better value, and it is still overpriced in most areas. Of course, every market will have many factors to consider.

[katnapped]

21. Sounds like the rich need another tax cut

In order to fix the problem!

[JDPriestly]

25. "Unexpectedly"? Do these people really believe that we are in a recovery?

I have several friends who were jobless for a long time. They now have jobs --- low-wage jobs. One of them finally got a little gig as a waitress.

Recovery is when you return to the state you were in before you fell ill. We are not even thinking about that yet.

How in the world can a person living in Southern California buy a new house if they only have a part-time job paying just a little more than minimum wage?

[Lucky Luciano]

26. The unexpectedness was relative to the average number amongst a group of economists.

They expected 290K which is a horrible number...In other words, no economist was calling for a housing recovery - they were calling for 290K sold and the number came in 250k.

Why does a call for 290K imply that economists see a total recovery?! They know better than everyone on this board that housing is a shitshowof the highest order. Predicting theexact number sold is very hard though.

If the number came in 330K, the headline would say that more houses err sold unexpectedly and it still wouldn't be bullish because 330k is also a disaster.

Normal numbers are 550-850K and during the bubble, it was more like 1200-1300K.

No economist was expecting a housing recovery.