Time to Start Worrying?
Recent data releases do not portray a particularly healthy housing market, and this week’s print on February new home sales raises the level of concern even higher. New home sales slid for the fourth month in a row, falling to a new record low of 308,000; however, that was only one of several negatives to be found in this report. Inventories are growing again as the months’ supply of new homes climbed to 9.2 months while homes are now spending a median length of 14.4 months on the market after being put up for sale, which is a new record high. Although lousy weather was a problem during February, its impact on new home sales data was probably marginal. As a result, this most recent data point highlights a potentially disturbing trend for the housing market and for the economy as a whole. Indeed, new home sales generate a significant amount of auxiliary economic activity and any lingering weakness in new home sales could spell trouble for a broader U.S. economic recovery.
03-26-2010 8:21 PM