Tag Archives: Neil Dutta

New Home Sales Fall in EU

WASHINGTON – Sales of new homes in the U.S. fell in February, while prices rose to their highest level in eight months, according to a government report released Thursday paints a mixed picture on the housing market.

Sales of new homes fell 1.6% in February to an annualized and seasonally adjusted than 313,000 units, said the Commerce Department.

The January figure was revised to a lower than 318,000 units from the originally announced 321,000.

Economists polled by Reuters had forecast sales at an annual rate of 325,000 units in February.

“This is an indication that the housing market is still quite weak,” said Neil Dutta, an economist at Bank of America Merrill Lynch in New York.

At the same time, there were signs of improvement in the new home market, as reflected in upward revisions to figures for November and December. Compared to February last year, new home sales rose 11.4%.

Meanwhile, the median price of a new house rose 8.3% to $ 233.700, the highest level since June. Compared to February 2011, the price increased 6.2%.

Prices of Treasury bonds extended their gains after the report, while the dollar deepened its losses against the yen and stocks fell to session lows.

The report, which closes a week of data on real estate, was broadly in line with the number of home sales used.

Sales of previously owned homes fell in February, but the price rose to an annual rate.

The housing market is still affected by an excess of existing homes for sale, especially those topped sold below its value.

While the pace of new home sales remained above the 300,000 units, only one fifth of the 1,389,000 units sold in July 2005.

The inventory of new homes on the market remained unchanged at a record low of 150,000 homes. At the February sales pace, it would take 5.8 months to empty inventories, a slight increase from 5.7 months in January.

Sales rose in the northeast and east of the country, while they fell in the South and Midwest.

New home sales account for only 7% of the overall housing market and face strong competition in the sector of existing homes.