Interest Rate Roundup

Friday, April 24, 2009

New home sales a better-than-expected 356,000

The new home sales report for March was just released. Here's what the data showed:

* New home sales declined 0.6% to a seasonally adjusted annual rate of 356,000 from 358,000 in February. These numbers were better than expected -- the market was looking for sales of 337,000. Figures for December, January and February were also revised higher by a net 31,000 units.

* The raw number of homes for sale continued to decline, falling to 311,000 from 328,000 in February. The months supply at current sales pace indicator of inventory declined to 10.7 from 11.2.

* The median price of a new home dropped 3.5% to $201,400 from $208,700 in February. That was also a decline of 12.2% from $229,300 in the year-earlier period. New home prices are now at the lowest level since December 2003 ($196,000).

Lower home prices are starting to bring out buyers. That's the story here in a nutshell. We've seen new home sales activity stabilize for a few months, even as prices have slumped to the lowest level in more than five years. Rising unemployment is still a problem, and a big enough one to ensure that any housing rebound remains muted. But all signs point to a stabilization in market conditions, something I haven't been able to say for a long time.

2 Comments:

  • Michael, What happens when the shadow housing foreclosures are released on the market. We have about 80,000 - 120,000 of these units in California alone. Is this market stabilized for real? Or is it just a pleasant plateau created for Obama's 100th day in office events? What do you see in the housing market over the next nine months?

    By Blogger Thom H, at April 24, 2009 at 2:27 PM  

  • Thom H, check out T2 Partners April presentation:

    http://www.scribd.com/doc/14166113
    /T2-Partners-Presentation-on-the-
    Mortgage-Crisis4309-3?
    ref=patrick.net

    Pages 9, 38, 39, 40, and 41 are the money-shots.

    Bottom-line: there is still a trememdous amount of stress in the housing market. As unemployment continues to increase, we will see defaults and foreclosures accelerate across all loan types (alt-A, prime, jumbo, option arm, etc.).

    Layer on top of that mess the fact that many banks are holding foreclosed property on their balance sheet and have not yet offered it back on to the market.

    There are still huge, huge issues facing the housing market. Many regions will see defaults and foreclusers increase into and through the year 2011.

    Good luck.

    By Blogger Barnacle Bill, at April 25, 2009 at 2:52 PM  

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