Wednesday, March 24, 2010
The Commerce Department reports(.pdf) that new home sales reached all-time record lows last month, below the levels seen in early-2009 at the height of the financial market crisis.
Sales of new homes fell from an upwardly revised annual rate of 315,000 in January to just 308,000 in February as homebuilders continue to lose the battle they've been waging with low-priced distressed property in many parts of the country and the urgency of the original December expiration of the homebuyer tax credit has long since faded.
As in yesterday's disappointing report on existing home sales, the "Months of Supply" metric is back on an upward path and this could be the beginning of another leg down for home prices. The expiration of the extended homebuyer tax credit in the months ahead should boost sales to some degree, however, there is a good deal of uncertainty as to how big a boost will be seen, the more important question being what happens after that.