Mar
31

Mild Winter Accounts for Lower New-Home Sales

March 31, 2012

U.S. new-home sales fell slightly last month, and you can put the blame on housing hurdles and the weather.

The sales of newly built, single-family homes dropped 1.6 percent to a seasonally adjusted annual rate of 313,000 units in February, according to new data released by HUD and the U.S. Commerce Department.

new home in a box“To some extent, we believe that exceptionally good weather conditions in December helped pull some home sales forward that would otherwise have occurred in January and February, which partially accounts for the declines we’ve seen at the beginning of this year,” said National Association of Home Builders Chief Economist David Crowe.

“However, the February sales rate is still 11.4 percent above its year-ago level, and the quarterly average sales pace is at a two-year high. Meanwhile, the inventory of new homes for sale remains at an all-time record low, in part because of the lack of available financing for new-home production.”

While last month’s sales fell 2.4 percent in the Midwest, where Chicago real estate lies, and 7.2 percent in the South, new-home sales rose 8.0 percent in the West and 14.2 percent in the Northeast in February.

The report also showed greater buying activity in homes above $200,000 last month. That is probably because those with higher incomes can more easily qualify for a mortgage, while first-time buyers looking in the lower price ranges may be having a harder time getting qualified.

“While many builders are seeing more traffic through their model homes as the spring buying season gets underway, tight lending conditions and appraisal issues continue to pose significant obstacles to prospective purchasers,” said Barry Rutenberg, chairman of the National Association of Home Builders. “These hurdles are definitely slowing the momentum of the housing and economic recovery.”

So are foreclosures. Tune in to Chicagoland Real Estate Forum tomorrow for more on that story.

Categories: Economy, New Homes

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