Washington, Mar. 26--Sales of new, single-family homes unexpectedly dropped again in February, adding to data suggesting that the once red-hot housing market is cooling down.
New-home sales fell by 8.1% to a seasonally adjusted annual rate of 854,000, the lowest level since August 2000, the Commerce Department said Wednesday. This follows a revised 12.6% drop in January new-home sales to a level of 929,000. Previously, January new-home sales were estimated as a 15.1% decline to a 914, 000 annual rate.
The report was much weaker than Wall Street's expectations; economists predicted sales would rise by 1.1% to a 924, 000 annual rate.
The new-home sales data follows a Tuesday report on existing home sales, which showed those sales declined by 4.3% to a 5.84 million annual rate in February. Some economists had warned that new-home sales could be pulled down by snowstorms that hit the East Coast in February.
The decline in the February housing data came despite record-low interest rates, which averaged 5.84% for the month on a 30-year fixed-rate mortgage. Mortgage applications also fell by about 10% during the month. Still, housing remains at historically healthy levels.
The housing market has been surprisingly strong for the past several years, even weathering the economic recession that began in March 2001.
February new-home sales were pulled down by a 36.8% drop in the Northeast, a 6.3% decline in the Midwest and an 8.6% decline in the South. Sales in the West were unchanged for the month.
The inventory of homes on the market rose to a more than five-year high of five months' supply in February from 4.5 months' supply in January.
Home prices, however, continued to rise during the month. The median price for a new home, the midpoint of all prices, rose to $188,800 in February from $179, 600 in January. The average price for a new home rose to $235,000 from $225,400 in January.
An estimated 75,000 homes were actually sold in February, based on figures that aren't seasonally adjusted.
The report also showed that December new-home sales were slightly revised as a 4% rise to a 1.063 million annual rate. December sales were last estimated as a 4.1% increase to a record 1.077 million annual rate.
