Feb New Home sales, a measure of contract signings of new homes, totaled 250k, the lowest on record dating back to 1963 and 40k below expectations. Sales in all 4 regions fell. To put into perspective, US population size in 1963 was 190mm vs 310mm today. In Jan 1963, new home sales totaled 591k. With the sales drop and stable level of homes for sale (186k), the months supply rose to 8.9 from 7.4, the most since Aug. The median price fell 8.9% y/o/y and 13.9% sequentially. Builders continue to face large competition from still too many existing homes on the market, and while they continue to suffer thru a very difficult time, I repeat my comment from last week when Housing Starts were poor that the bright side of this low level of new home sales is that hopefully it allows the market to further purge itself of the inventory of existing homes as we don’t need more new homes right now.
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