Feb New Home Sales, a measure of contract signings, totaled 308k, 7k less than expected and down from an upwardly revised (by 6k) 315k last month, so taken together it’s in line but sales are at a record low. Taken with an increase of 3k in the absolute number of homes for sale, the inventory to sales ratio rose to 9.2 from 8.9, the highest since May ’09. Weather may have impacted traffic as sales fell in the Northeast and Midwest but they also fell in the South. The West however saw a gain to the most since Oct ’09. The median home price did rise 5.2% m/o/m and also 6.1% sequentially even with the depressed volume of sales. With tremendous competition from foreclosures, the law of diminishing returns with the first time home buying tax credit and still uncertain labor market, sales of course are suffering. Ideally with still high inventories, we don’t need any more new homes for the time being.
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