New Residentail Sales In February 2006

Sales of new one-family houses in February 2006 were at a seasonally adjusted annual rate of 1,080,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). This is 10.5 percent (±12.4%)* below the revised January rate of 1,207,000 and is 13.4 percent (±12.5%) below the February 2005 estimate of 1,247,000.

The median sales price of new houses sold in February 2006 was $230,400; the average sales price was $296,700. The seasonally adjusted estimate of new houses for sale at the end of February was 548,000. This represents a supply of 6.3 months at the current sales rate.

New Residential Sales data for March 2006 will be released on Wednesday, April 26, 2006, at 10:00 A.M. EDT.

For more details, the Internet site is:
http://www.census.gov/newhomesales (Source: CB06-45 )

According to the National Association of Home Builders (NAHB), “While today’s numbers are weaker than expected, they’re generally in line with what builders have been saying in our surveys,” said National Association of Home Builders (NAHB) President David Pressly, a home builder from Statesville, N.C. “Demand seems to be tapering off as mortgage rates inch up and it becomes more challenging to afford to buy a home. We believe the market is transitioning to a cooler but still-healthy level.”

“When looking at these numbers, you have to step back and focus more on trends than on month-to-month shifts to see meaningful patterns,” added NAHB Chief Economist David Seiders. “This government report traditionally has lots of month-to-month volatility and is subject to substantial revision.” Referring to a 29.4 percent decline in new-home sales reported for the West region, he said, “It would not be unusual for that number to be revised upward or to show some rebound in the next report.”

The inventory of unsold homes was the highest month’s supply number since January of 1996.

“One factor in the inventory situation is the substantial housing starts activity that took place in the January – February period as builders took advantage of unseasonably warm weather to get a jump on production schedules,” noted Seiders. “That months supply number will most likely come down as housing starts taper off and if the sales pace picks up – as we expect it to.”

NAHB is currently projecting a decline of approximately 8 percent in new-home sales for 2006 as a whole, which would return the market to roughly the same healthy level of activity posted in 2004.

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