Housing Bubble

New home sales fall 8.1 percent, inventories rise

March 26, 2003

Despite record low interest rates, sales of new one-family houses in February 2003 were at a seasonally adjusted annual rate of 854,000, according to estimates released jointly today by the U.S. Census Bureau and the US Department of Housing and Urban Development. This is 8.1 percent below the revised January rate of 929,000 and is 8.9 percent below the February 2002 estimate of 937,000.

This second straight monthly decline was below analysts expectations and shows new homes being purchased at the slowest rate since August 2000.

Regionally, the largest fall was recorded in Northeast with a drop of 36.8 percent, although this area was severely affected by snow. Elsewhere sales fell 6.3 percent in the Midwest with the South recording a drop of 8.6 percent and the largest sales volume. The West managed to buck the falling sales trend and remained flat.

The median sales price of new houses sold in February 2003 was $188,800; the average sales price was $235,000. The seasonally adjusted estimate of new houses for sale at the end of February was 352,000. This represents a supply of 5.0 months at the current sales rate, a rise from 4.5 months in January, the highest level for over five years.

Source: www.census.gov