Wednesday, March 26, 2008
A short time ago, the Commerce Department reported that sales of new homes fell to a fresh 13-year low in February, down 1.8 percent from January and down 29.8 percent on a year-over-year basis.
Inventory remained at historically high levels with the "months of supply" figure unchanged from last month at 9.8 months. The number of homes on the market, however, dropped by 2.1 percent to the lowest level since July 2005, likely an indication that builders are cutting back amid slowing sales.
The median sales price rose from $225,600 in January to $244,100 in February, but home prices are down 2.7 percent from year-ago levels. It really is hard to make much of the median price data for new home sales as the value of upgrades and other incentives have an outsized impact on the true cost to the homebuyer.