Rising in February, New Home Sales May Be Near Bottom
Providing a welcome glimmer of hope that potential home buyers are starting to return to the market, sales of newly built, single-family homes rose for the first time in seven months in February, according to Commerce Department figures released on March 25.
The report showed a 4.7% gain in new-home sales to a seasonally adjusted annual rate of 337,000 units in February, along with upwardly revised figures for each of the previous three months.
"This is an encouraging sign that the market may finally be reaching a bottom,” said NAHB Chairman Joe Robson. “Consumers are beginning to take advantage of the first-time home buyer tax credit, historically low mortgage rates, very affordable home prices and the great selection of homes they have to choose from in the midst of a real buyer’s market. For those with good credit and job security, the stars are all aligned to buy a home at this time.”
"February’s gain may also be tied to demand delayed in January, when potential buyers were waiting to see what kind of incentives would be included in the economic stimulus package,” said NAHB Chief Economist David Crowe. “Keep in mind that the January to February average for new-home sales is still below the fourth quarter 2008 average, and we do expect sales numbers to bounce around a bottom before climbing slowly mid-year and beyond. Nevertheless, it is apparent that measures within the recent stimulus package — including the first-time buyer tax credit as well as higher mortgage ceilings for conforming loans — Fed moves to lower mortgage rates and home builder sales incentives are helping to reverse the three-year slide.”
Crowe cautioned that certain negative factors must still be addressed, including tight credit conditions for home buyers as well as the still-rising inventory of foreclosed homes on the market.
Indicating that builders are keeping a tight rein on inventories, the number of unsold new homes on the market continued to decline for the 22nd consecutive month to 330,000 units in February. The months’ supply also declined, to 12.2 in February, down from 12.9 in the previous month.
Regionally, new-home sales rose strongly in the two largest markets in February, with gains of 9.7% in the South and 6.6% in the West. Sales declined in the Northeast and Midwest, by 3.3% and 9.1%, respectively.
Tax Credit Web Site Looks at Opportunity of a Lifetime
Builders and other industry professionals can help spur home sales by referring prospective first-time home buyers to www.federalhousingtaxcredit.com. The NAHB Web site provides detailed information on the $8,000 federal tax credit for first-time home buyers included in the economic stimulus legislation signed into law by President Obama.
Consumers can use the Web site to find information on the tax credit – including a detailed question and answer section. It also includes information about other housing-related and small business measures in the legislation and a number of home-buying resources for consumers.
Spanish Version Also Available Online
A Spanish version of this increasingly popular Web site is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.
Industry professionals are encouraged to highlight either tax credit Web site when marketing to their potential first-time home buyer market.
Plan to Attend Construction Forecast Conference
Plan to attend or watch the 2009 Spring NAHB Construction Forecast Conference & Webcast on Thursday, April 23 in Washington, D.C. to get the latest facts, insights and analysis of the housing industry.
Panels of nationally recognized experts at the day-long conference will discuss economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys.
For more information and to register, visit www.nahb.org/cfc.
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