Monday, January 28, 2008
The Census Bureau reported that homebuilders slashed new home prices by ten percent in December but sales volume fell by five percent anyway - to the lowest level in 12 years.
Another change of scale was
nearly required for the chart above as home sales plunged from a downwardly revised, seasonally adjusted, annualized rate of 634,000 in November to just 604,000 in December, far below the consensus estimate of 650,000.
From year-ago levels, new home sales have plunged 41 percent, however, since cancellations are not included in the data, these figures overstate the health of the homebuilding sector as cancellations continue to increase.
The lower sales total contributed to a higher inventory of unsold homes that now stands at a 26-year high, rising from 9.4 months of supply in November to 9.7 months.
The median price plunged by 10 percent on a year-over-year basis, from $244,700 in December of 2006 to $219,200 last month, the largest annual decline since 1970.
The news just keeps getting worse for homebuilders.