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Market Watch has the details on the new home sales report and it doesn’t look pretty (lots more at Calculated Risk). While sales are off 30% year-over-year we still have 10 months worth of new inventory, the highest since 1981. On the bright side we’re slowly cutting in to excess inventory which is an important step in pulling out of this ridiculous tail spin.
Interesting note on the whole recovery debate. The “bottom calling” has picked up a lot of momentum lately, and I think it is still largely unfounded. I was talking to a couple of hedge fund folks yesterday and they referenced a new Goldman report which in essence estimates that we’ve seen only a fraction of the total losses (across all credit types from mortgages to synthetic CDOs to credit cards) that will result from this unwind. To me it seems we have a long way to go.
From Market Watch on the decline in new home sales:
Sales of new homes in the United States fell to a 13-year low in February, dropping 1.3% to a seasonally adjusted annual rate of 590,000, the Commerce Department estimated Wednesday. Sales have fallen four months in a row and are off about 30% in the past year. The number of homes on the market dropped by 2.1% to 471,000, the lowest since July 2005, an indication that builders are trying to work off their bloated inventories of unsold homes. The inventory represented a 9.8-month supply at the February sales rate, unchanged from January and the highest since 1981. The median sales price fell 2.7% in the past year to $244,100.
