US new home sales off in Feb but prices rose

26 March 2008 15:47  [Source: ICIS news]

WASHINGTON (ICIS news)--US sales of new single-family homes fell 1.8% in February from January and marked a nearly 30% decline from February 2007, the Commerce Department said on Wednesday.

 

On Wall Street, major exchanges were down sharply on news of the continuing home construction market decline and the 1.7% fall in new orders for US durable goods.

 

In the housing market, the department said that sales of new homes in February were at a seasonally adjusted annual rate of 590,000 units compared with the revised January rate of 601,000 new homes sold (also seasonally adjusted and annualised).

 

February’s new home sales were 29.8% below the level of 840,000 units seen in February a year ago, the department said.

 

In addition, the inventory of new homes available for sale at the end of February was a seasonally adjusted estimate of 471,000 units, representing a supply of nearly 10 months at current sales rates.

 

That inventory level is about even with the number of new homes available on the market in January, although February’s figures were down marginally. 

 

During normal economic conditions, the US would have an inventory of new homes to last only six months or less.

 

However, in what might be seen as a positive sign for the housing market, the average price of a new home in February rose 4.9% from January to $296,400 (€189,696), suggesting that despite the decline in the number of new homes sold, buyers are showing a willingness to pay slightly more to get the homes they want.

 

The increase in the average price for new homes also may reflect the 3% increase in sales of existing homes in February as reported by the National Association of Realtors (NAR).

 

The average new home price last month was still nearly 8% below the $321,500 average seen in February last year.

 

The home construction market is a key downstream consuming sector for the chemicals industry.

 

($1 = €0.64)

By: Joe Kamalick
+1 713 525 2653

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