New Home Sales Drop Shows Need for Congress to Act Now
Sales of new single-family homes fell by 1.8% in February to a seasonally adjusted annual rate of 590,000 units, according to numbers from the U.S. Commerce Department released on March 26. Last month’s sales pace was down nearly 30% from a year earlier and 58% from the peak in July 2005.
"Builders have been pulling out all the stops to sell homes and narrow the supply of units on the market," said NAHB President Sandy Dunn. "Unfortunately, buyer demand remains very weak heading into the spring home buying season. Clearly, Congress needs to act decisively when it returns from its recess next week to enact measures that will keep housing from dragging the economy into a recession."
"Our latest member surveys confirm that builders have seen an improvement in the number of prospective buyers who are visiting model homes, and consumer attitudes toward home buying have perked up in recent months," noted NAHB Chief Economist David Seiders. "But this hasn't yet translated into greater sales activity, and it stands to reason that additional stimulative measures — such as a temporary home buyer tax credit, FHA modernization and GSE reform — could have substantial positive impacts on both the housing market and the overall economy."
Regionally, sales activity was mixed in February, with gains of 40.3% in the Northeast, 5.7% in the South and 0.7% in the West but a decline of 6.4% in the Midwest.
On a positive note, builders' efforts to reduce their inventories drove the number of new homes on the market down by 2.1% to a seasonally adjusted 471,000 units in February. However, the supply of units at the current sales pace remained unchanged at 9.8 months and the median length of time that completed homes were on the market rose to 7.2 months from 6.7 months in January.
"This is a truly critical time for housing and the economy, and Congress needs to get right down to business," Dunn said. "Every day that lawmakers fail to act is a missed opportunity for improvement."
Attend the Spring Construction Forecast Conference in April
Plan to attend NAHB's Spring Construction Forecast Conference on Thursday, April 24 at the National Housing Center in Washington, D.C. The conference brings together the nation's premier housing economists and finance experts for an in-depth examination of the economic outlook for the housing industry.
Can't attend? Watch the conference webcast live.
For more information, or to register for the conference or webcast, visit www.nahb.org/cfc.
Want to Know the Housing Forecast for the Top 100 Metros?
Find out in HousingEconomic.com’s 2008 to 2009 Metro Forecast (free preview).
Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables.
To learn more, visit www.HousingEconomics.com.
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.