February New-Home Sales Lowest Since August 2000
New single-family home sales last month hit their lowest level since the waning days of the Clinton Administation.
The U.S. Commerce Department reported that sales of new single-family homes fell 3.9 percent last month to a seasonally adjusted annual rate of 848,000, the lowest monthly level since August 2000. The new recent low followed downward revisions to sales rates for November, December and January.
Sales were down 26.8 percent in the Northeast, 20 percent in the Midwest and 7 percent in the South. The West, however, posted a 24.6 percent gain.
The National Association of Home Builders (NAHB) placed the blame for the sales decline chiefly on the mortgage market, in the face of optimistic trends otherwise.
“Our recent builder surveys show a decline in builder sentiment in early March, associated with serious concerns about how the subprime-related shakeout in the mortgage market will affect the housing sector,” said Brian Catalde, NAHB president (NAHB) and a home builder from Playa del Rey, Calif.
NAHB Chief Economist David Seiders called the decline in new-home sales “troubling, particularly in view of supportive economic fundamentals—job growth and household income are solid and the interest rate structure remains quite favorable. Furthermore, the weakening is occurring despite improving affordability conditions in the marketplace, improvements in consumers’ assessments of home buying conditions, and ongoing efforts by builders to reduce inventories by cutting prices and offering other sales incentives.”
Seiders added, “Housing is a credit-dependent sector, and a broad-based tightening of mortgage lending standards certainly does not bode well for families seeking to buy homes.”