Wednesday, December 31, 2008

New single-family homes were sold at an annual rate of 407,000 in November

New single-family homes were sold at an annual rate of 407,000 in November

here is some fresh information by Brian S. Wesbury - Chief Economist Robert Stein, CFA - Senior EconomistDate: 12/23/2008 - enjoy!

New single-family homes were sold at an annual rate of 407,000 in November,slower than the consensus expected 415,000 pace. Sales are down 35.3% versusa year ago and down 70.7% versus the peak in 2005.

Sales were down in the Midwest and South, but up in the Northeast and West.

At the current sales pace, the supply of unsold new homes fell to 11.5months in November. The inventory of new homes fell to 372,000, down 34.7%from the peak in mid-2006.

The median price of new homes sold was $220,400 in November, down 11.5% versus a year ago. The average price of new homes sold was $287,000, down9.2% versus last year.

Implications: New single-family home sales in November dropped to thelowest level since 1991. However, part of the recent decline is due torumors of the federal government making home purchase mortgage loans widelyavailable at 4.5% interest. This possible offer is likely getting manypotential home buyers to postpone their purchases into 2009, to see whetherthe incoming Obama Administration will implement this policy, which wasleaked by the outgoing Bush Administration. Despite the depressed rate ofsales, home builders are continuing to work off excess inventories. Totalnew home inventories are now down to 372,000, a reduction of almost 35%versus the peak in mid-2006. The number of unsold completed new homes - akey factor behind future construction and price changes - peaked in January 2008 at 199,000 and is now down to 172,000, the steepest decline on record.There is more pain to come in the housing sector but the light at the end ofthe tunnel is gradually getting closer. We anticipate that home building andprices will bottom by late 2009, leading to a housing recovery in 2010.
This information contains forward-looking statements about various economic trends and strategies. You are cautioned that such forward-looking statements are subject to significant business, economic and competitive uncertainties and actual results could be materially different. There are no guarantees associated with any forecast and the opinions stated here are subject to change at any time and are the opinion of the individual strategist. Data comes from the following sources: Census Bureau, Bureau ofLabor Statistics, Bureau of Economic Analysis, the Federal Reserve Board,and Haver Analytics. Data is taken from sources generally believed to bereliable but no guarantee is given to its accuracy.