New Home Sales in Feb unexpectedly drop

The amount of contract signings of new homes in Feb totaled 313k, 12k less than expected and Jan was revised down by 3k to 318k. At 313k, it is about in line with the two year average of 312k. With the drop in sales as the amount of homes for sale was unchanged, months supply ticked up for a 2nd month to 5.8 from 5.7. The average home price did rise by 6.2% y/o/y and 8.3% m/o/m to $233,700 after a decline in Jan. Bottom line, the sales of new homes during the winter, whether helped by the weather or not still are punk as the so called winter of ’12 (Dec thru Feb) saw an average sales total of 322k per month, barely above the 307k seen in the same months in a real winter of ’11. For perspective, sales of new homes are still down about 75% from the peak in ’05. In the KBH press release this morning, whose stock is down sharply on earnings disappointment, they said “Reflecting the improving trends in the economy…we are seeing signs that the overall housing market is stabilizing and beginning to recovery” but, ” the pace of the recovery is uneven, however, with certain local markets showing greater strength and more normalized activity than other areas where a rebound will take longer to manifest.”

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