WASHINGTON (Thomson Financial) - Sales of new homes in the United States continued to fall in May, dragging prices down and increasing the time it takes for builders to hand over the keys to new homeowners, the Commerce Department reported on Wednesday. New home sales were down 2.5 percent to a seasonally adjusted annual rate of 512,000 units. Economists polled by Thomson Reuters IFR Markets had expected a smaller slowdown to 515,000 annual units. The median price of a new home fell 5.7 percent from a year earlier to $231,000. 'But these numbers are so erratic as to be usless,' said Ian Shepherdson of High Frequency Economics. Builders managed to cut 16.9 percent off the actual number of unsold homes to 453,000, the largest monthly decline since July 1997. However, the slower sales pace left the inventory of new homes at a 10.9 months supply, up from 10.7 in the previous month. 'Continued large supply relative to demand, in spite of a sharp decline in housing starts, indicates that prices of new homes will remain on a downward trend for some time and until they are low enough to stimulate sufficient demand to clear the market,' said Joshua Shapiro of MFR. Sales estimates were revised down by 1,000 units for April, adding to a modest net revision of minus 9,000 units for the previous three months. Meanwhile, sales in the West fell by 11.6 percent to an annual rate of 114,000 units, the lowest level since September 1982. Sales in the Northeast fell by 7.9 percent to a 35,000 annual unit pace. New home sales increased in the Midwest and South, by 5.1 percent and 0.4 percent respectively. Sales in the South, the country's largest region, reached an annual pace of 281,000 units.
Wednesday, June 25, 2008
US May new home sales down 2.5 pct to 512,000 unit annual pace UPDATE - Forbes.com
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