Supply of New Homes Is Lowest Since August 1967

Check out today’s housing report. The supply of homes on the market is at its lowest since since August 1967. Yet prices are still down from a year ago!

The Commerce Department said on Monday sales rose 11.1 percent to a seasonally adjusted 300,000 unit annual rate, after an upwardly revised 270,000 unit pace in February.

Economists polled by Reuters had forecast new home sales climbing to a 280,000-unit pace last month from a previously reported record low 250,000 unit rate.

Compared to March last year sales were down 21.9 percent.

The market for new homes is being squeezed by competition from previously owned homes and a deluge of foreclosed properties, even though inventories of new houses are at a 43-1/2 year low.

A report last week showed there were 3.55 million previously owned homes on the market in March, well above the economy’s natural rate of between 2 million and 2.5 million.

When foreclosed homes and those that are highly delinquent are taken into account, economists say supply is anywhere in the range of 8 million to 9 million.

The median sales price for a new home rose 2.9 percent last month to $213,800 from February. Compared with March last year, the median price fell 4.9 percent.

Posted by on April 25th, 2011 at 10:45 am


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