Friday, January 27, 2012

New home sales down UNEXPECTEDLY in Dec. 2011. Total 2011 worst on record since 1963-Bloomberg

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"Stocks reversed gains after the figures."...Median price of new home down 12.8% in Dec, 2011. Fewest new homes on the market in US history in Dec. 2011.

1/26/12, "Sales of U.S. New Homes Unexpectedly Decline in December," Bloomberg

"Sales of new U.S. homes unexpectedly declined in December for the first time in four months, capping the slowest year on record for builders.

Purchases of single-family properties decreased 2.2 percent to a 307,000 annual pace, figures from the Commerce Department showed today in Washington. The median forecast in a Bloomberg News survey of economists called for a rate of 321,000 home sales. Last year marked the worst year for the industry in records going back to 1963....

Following a lull in 2011, a wave of foreclosures may hamper the recovery in real estate as more distressed properties are put on the market.

“Builders continue to contend with a number of existing homes that are deeply discounted,” said Anika Khan, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina....

Today’s figures underscore the Federal Reserve’s view that the housing market is holding back the U.S. expansion. In 2011, builders sold 302,000 homes, down 6.2 percent from 2010. Sales in the Northeast and West were also the lowest on record, while purchases in the South were the weakest since 1966.

Stocks reversed gains after the figures. The Standard & Poor’s 500 Index fell 0.1 percent to 1,324.92 at 10:46 a.m. in New York after climbing as much as 0.6 percent earlier. The yield on the benchmark 10-year Treasury note dropped to 1.95 percent from 2 percent late yesterday.

Economists’ Projections [November revised down-Ed.]

Projections from the 75 economists in the Bloomberg survey ranged from 309,000 to 350,000. The government revised November sales to a 314,000 rate from a previously reported 315,000.

The December decrease in new-home purchases was led by a 10.1 percent drop in the South, the biggest decline since May 2010. Sales also fell in the Midwest. Demand increased 46.7 percent in the Northeast, a rebound from the 16.7 percent decrease the previous month.

The median price of a new house purchased last month declined 12.8 percent, the biggest drop since February 2009, from December 2010 to $210,300, today’s report showed.

The supply of homes at the current sales rate increased to 6.1 months’ worth from 6 months in November. There were 157,000 new houses on the market at the end of last month,

  • the fewest on record."...


via Instapundit

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