New home sales at 4-month high, supply drops - Yahoo! News

WASHINGTON (Reuters) – New single-family home sales rose for a second straight month in April and supply was the lowest in a year, but an overhang of previously owned homes on the market will stifle any housing market recovery.

The Commerce Department said sales increased 7.3 percent to a seasonally adjusted 323,000 unit annual rate, the highest level since December, while prices also rose. Economists had expected a 300,000-unit pace.

All four regions recorded gains in sales, with the West reporting a 15.1 percent rise. However, compared to April last year sales were down 23.1 percent.

"Although the headline figure has moved sharply on a month-to-month basis, reflecting in part the impact of harsh weather in earlier months, the bottom line is that the new home market continues to bounce along the bottom," said Omair Sharif, an economist at RBS in Stamford, Connecticut.

An oversupply of used houses and a relentless wave of foreclosed properties are curbing the market for new homes, even as builders are keeping lean inventories.

There were a record low 175,000 new homes available for sale last month, down 2.8 percent from the prior month.

Data last week showed a steep drop in new home construction in April and a dip in sales of previously owned homes.

"There's still a tremendous overhang in the housing market, and while new home sales are starting to percolate, that doesn't change the fact that we still have such huge inventory," said Michael Yoshikami, chief investment strategist at Ycmnet Advisors in Walnut Creek, California.

Stocks on Wall Street were little changed, while prices for U.S. government bonds fell ahead of new debt sales later in the week. The dollar fell against a basket of currencies.

SLUGGISH GROWTH

While the report cast a positive light on the housing market, it did little to change perceptions the economy remained mired in a soft patch.

That view was reinforced by a Richmond Federal Reserve survey showing manufacturing activity in the central Atlantic region stalled in May, after expanding during the previous seven months.

The Richmond Fed's manufacturing index came in at -6, a sharp contraction from the reading of +10 in April, dragged down by declining shipments and new orders.

It added to a raft of other data ranging from retail sales to industrial production that have painted a picture of an economy struggling to regain momentum as the second quarter started, with employment only the bright spot.

The government is expected to report on Thursday that the economy grew at a still tepid 2.1 percent annual rate in the first quarter, according to a Reuters survey, rather than the 1.8 percent pace it estimated last month.

The upward revision will most likely reflect a slightly faster pace of inventory accumulation than initially thought.

The Commerce Department report also showed the median sales price for a new home rose 1.6 percent last month to $217,900. Compared with April last year, the median price increased 4.6 percent.

At April's sales pace, the supply of new homes on the market dropped to 6.5 months' worth, the lowest since April last year, from 7.2 months' worth in March.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman)

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New Home sales appear to be in decent change, but builders are keeping their inventories low because demand is low due to a huge supply of resale homes. Those resale homes will be around for a lot longer.

New home sales up, inventory at 43-1/2 year low - Yahoo! News

WASHINGTON (Reuters) – New U.S. single-family home sales increased more than expected in March and the supply of new houses on the market hit their lowest level since August 1967, but prices fell from a year ago.

The Commerce Department said on Monday sales rose 11.1 percent to a seasonally adjusted 300,000 unit annual rate, after an upwardly revised 270,000 unit pace in February.

Economists polled by Reuters had forecast new home sales climbing to a 280,000-unit pace last month from a previously reported record low 250,000 unit rate.

Compared to March last year sales were down 21.9 percent.

The market for new homes is being squeezed by competition from previously owned homes and a deluge of foreclosed properties, even though inventories of new houses are at a 43-1/2 year low.

A report last week showed there were 3.55 million previously owned homes on the market in March, well above the economy's natural rate of between 2 million and 2.5 million.

When foreclosed homes and those that are highly delinquent are taken into account, economists say supply is anywhere in the range of 8 million to 9 million.

The median sales price for a new home rose 2.9 percent last month to $213,800 from February. Compared with March last year, the median price fell 4.9 percent.

At March's sales pace, the supply of new homes on the market slipped to 7.3 months' worth from 8.2 months' worth in February. There were 183,000 new homes available for sale last month, the lowest since August 1967.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman)

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The main reason there is low inventory in Arizona is nobody has been building. So the supply side is really not that unexpected. Good news that sales are up, though.

New home sales plunge to record low in February - Yahoo! News

WASHINGTON (Reuters) – New single-family home sales unexpectedly fell in February to hit a record low and prices were the lowest since December 2003, showing the housing market slide was deepening.

The Commerce Department said on Wednesday sales dropped 16.9 percent to a seasonally adjusted 250,000 unit annual rate, the lowest since records began in 1963, after an upwardly revised 301,000-unit pace in January.

Sales plunged to all-time lows in three of the four regions last month. Economists polled by Reuters had forecast new home sales edging up to a 290,000-unit pace last month from a previously reported 284,000 unit rate.

"It's been a disappointing February for home sales and there are no signs of a turnaround," said Kurt Karl, chief U.S. economist at Swiss Re in New York.

"We're going to have a continuing slowdown in the next few months, but people will start to feel better in the second half of the year and construction and sales should do better later this year and into next year."

U.S. stock indexes fell on the data, while government debt prices rose marginally. The dollar was little changed.

Compared to February last year sales were down 28 percent.

An oversupply of homes exacerbated by an increasing flood of properties falling into foreclosure is frustrating recovery in the housing market. Data on Monday showed a steep drop in sales of previously owned homes in February, with prices tumbling to a near nine-year low.

HOUSE PRICES PLUNGE

The median sales price for a new home plunged 13.9 percent last month to $202,100, the lowest since December 2003. Compared with February last year, the median price fell 8.9 percent. Persistent price declines could dampen hopes of a pick-up in sales during spring.

In the face of stiff competition from foreclosed properties, which typically sell well below market value, builders are holding back on new construction.

At February's sales pace, the supply of new homes on the market rose to 8.9 months' worth, the highest since August, from 7.4 months' worth in January.

There were 186,000 new homes available for sale last month, matching the prior month's inventory. That was still the smallest supply of home since 1967.

Despite lean inventories, new home sales will likely continue to bounce along the bottom for a while until the glut of previously owned homes is whittled down. New home sales account for less than 10 percent of overall sales.

According to the National Association of Realtors, new home prices have been running 45 percent higher than existing home prices, a premium that is historically about 15 percent, indicating previously owned homes are selling well below the cost of construction.

Separately, the Mortgage Bankers Association said applications for home loans rebounded 2.7 percent last week.

(Reporting by Lucia Mutikani; Additional reporting by Ellen Freilich in New York; Editing by Andrea Ricci)

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The housing market continues to be a drag on the recovery.

New home sales hit record low in January - Yahoo! Finance

New home sales plummet 11.2 percent in January to annual rate of 309,000, lowest on record. The extra distressed property inventory will continue to be an issue for new homes sales for well into the future.

The AP story is here.