New-Home Sales Move Lower in January
In the latest evidence of a continuing housing market contraction, the U.S. Commerce Department reported on Feb. 27 that sales of new single-family homes declined 2.8% in January to a seasonally adjusted annual rate of 588,000 units, the slowest pace since February of 1995.
“While home builders are reporting some glimmers of buyer interest starting to develop, many consumers are still firmly planted on the fence, waiting for just the right incentive to make their move,” said NAHB President Sandy Dunn.
“Clearly, now would be an ideal time for Congress to follow up on its recently enacted economic stimulus program by passing legislation such as a home buyer tax credit that would help push those who are on the edge of a home buying decision off that fence and into the home of their dreams,” she said. “Such action would reduce the inventory of units on the market and help restore housing to its historic role as a primary engine of economic growth.”
“Our latest surveys reveal that builders are seeing greater traffic of prospective buyers through their model homes than in previous months, yet this has yet to translate to any improvement in actual sales activity,” noted NAHB Chief Economist David Seiders. “It stands to reason that policy measures to stimulate housing demand could be a powerful force and help bring about a housing and economic recovery.”
Three out of four regions of the country posted lower new-home sales in January, with declines of 10.3% in the Northeast, 7.6% in the Midwest and 2.4% in the South. The West showed a 2.2% gain for the month, making up for some lost ground from a large decline in December.
While the inventory of new homes for sale was down 2.2% to 482,000 units in January, the supply of units at the current sales pace edged up to 9.9 months, its highest level since April of 1982.
The median length of time that completed homes were on the market was 6.7 months in January, up from 6.2 months in December and 4.8 months a year earlier.
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Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown
What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn.
To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.