Have new house sales hit bottom?
WASHINGTON — It was the second-worst month on record for sales of new houses. But last month still brought a long-awaited shred of good news for the battered building industry.
February’s results, while still far below last year’s levels, provided some hope that new house sales have finally hit bottom and the worst may be past. Prices, however, are likely to remain weak for months as builders continue to clear out their stock of unsold houses.
The Commerce Department said sales rose 4.7 percent in February to a seasonally adjusted annual rate of 337,000 from an upwardly revised January figure of 322,000.
Even after the revision to January’s sales results, that month remained the worst on records dating back to 1963.
Economists had expected February sales to fall to a pace of 300,000 units.
The report "is another faint but nonetheless encouraging sign that the economic slide may be moderating," wrote David Resler, chief U.S. economist at Nomura Securities.
Because the report reflects signed contracts to buy new houses rather than completed sales, it could reflect the early impact of a new, $8,000 federal tax credit for first-time buyers payday loans.
Despite the boost, February’s sales were still down by more than 40 percent from the same month a year earlier. The median sales price fell to $209,000, a record 18 percent drop from the same month last year.
Some analysts remain skeptical new house sales are starting to recover, saying the data are notoriously volatile. Until job losses stop mounting, "I don’t think you’re going to see good housing numbers," said Patrick Newport, an economist at IHS Global Insight.
Nationally, the number of unsold houses fell to the lowest point since April 2002. But sales are so slow that it would take more than a year at the current sales pace to exhaust the supply.
"I’m hopeful the worst is over," said David Crowe, chief economist for the National Association of Home Builders. "I don’t think we’re quite out of the woods either. I think we will bounce around a bottom for a month or two."