New Home Sales Fall to 13-Year Low

Washington, DC, March 26, 2008—New home sales fell to a 13-year low in February, falling 1.3 percent to an adjusted annual rate of 590,000, the Commerce Department.

Sales have fallen four months in a row and have fallen about 30% in the past year.

The sales figures may overstate the number of sales, because they don't account for cancelled sales. The data are based on contracts signed, not sales closed.

The number of homes on the market dropped by 2.1 percent to 471,000, the lowest since July 2005. Builders are trying to work off their substantial inventories of unsold homes.

However inventory represented a 9.8-month supply, unchanged from January and the highest since 1981.

Inventories figures don’t include cancellations.

The number of completed homes for sale fell for the second straight month, standing at 188,000 after peaking in December at 197,000.

The median sales price fell 2.7 percent in the past year to $244,100. Luxury homes priced over $500,000 made up a larger portion of the market in February, rising to 10 percent from 8 percent.

The bottom end of the market shrank as homes priced at less than $200,000 fell to 33 percent of the market from 39 percent.