US New Home Sales September 08: Prices Continue to Fall, Sales Slightly Higher

The median sales price of a new home fell to a new four-year low of $218, 400, the US Census Bureau announced today.

The value of US consumers’ homes is closely related to their wealth, consumer confidence and consumer spending. While prices continue to fall there seems to be little hope of a near-term economic recovery.

The headline New Home Sales number beat analyst expectations of 452K, coming in at 464K annualized. This represents a 2.7% increase from August’s downwardly revised 452K sales. However, sales are still 33.1% lower than at the same time last year.

Contracting prices does seem to be restoring some demand to the housing market with 7.3% shaved from the inventory of unsold homes. At the current sales pace it would take 10.4 months to clear the 349K strong inventory. This is considerable better than the 11.4 months seen in August.

Sales in the West saw the biggest increase up to 108K from 88K previous while the South climbed to 269K from 267K in August. Sales in the Mid-West and North-East contracted, down to 65K and 22K from 69K and 28K respectively. The drop of 21.4% seen in the North-East brings the region to a record low annual sales pace.