Today, the U.S. Department of Housing and Urban Development and U.S. Census Bureau released new home sales data for February 2012 showing a decrease of 1.6 percent from the month before, and an increase of 11.4 percent from a year ago. The seasonally-adjusted new home sales rate for February was 313,000 homes, down from an adjusted rate of 318,000 homes the month before. This is the second consecutive month new home sales have declined.
The supply of new homes on the market increased to a 5.8 month supply from 5.7 months the month before. The median new home price increased 8.3 percent for the month to $233,700 from a revised median price of $215,700 the month before but increased 6.1 percent from a year ago when the median new home price was $220,100.
As has been my long-running mantra, I don’t like “seasonally adjusted” numbers and “rate” of sales. Why, for one I can’t figure out how in the world they compute the numbers. Second, I just don’t think discussing the “rate” of new home sales paints a realistic picture of the market.
Here is the raw data, the ACTUAL new homes sold- no fluff, no “adjusting” For February 2012:
- 25,000 new homes sold, down from 22,000 the month before and up from 22,000 a year ago.
- As usual, the South had the majority of the new home sales with 13,000 this month (52 percent of the total in US)
- the west region had 7,000 new homes sold.
- the Midwest had 3,000 new homes sold.
- The Northeast had 2,000 new homes sold.
- New Homes in the US in sold during the month been for sale for a median time of 7.6 months since the homes were completed, up from 7.3 months the month before.
What’s in store for 2012?
Mortgage delinquency rates and foreclosure rates still continue to fall which will begin lessening the downward impact on home prices foreclosures put on the market, which will be the first step toward stabilizing prices. I think it’s going to be a long process to get us back to the point where where existing home prices will increase to the point that there is not such a giant premium to pay for a new home as there is today, therefore I’m going to forecast a modest increase and am expecting to see somewhere between 304,000 – 334,000 new homes sold in 2012.