US new home sales down in February

| March 24, 2006 | 0 Comments

The sales of new homes in the United States was down 10 percent to 1.08 million in February, the fourth month in a row that sales have declined. Prices were down from last year as well, by 3 percent, and the supply of unsold new homes is higher than it has been in 10 years. At the present rate of sales, it would take 6.3 months to sell all the unsold new homes available.

Analysts believe that the new data is yet another sign that the housing market is finally beginning to slow down. Rising interest rates the fact that affordability of new homes is at a 15-year low are among the conditions that are putting the brakes on the sales of new homes. The slowdown in sales is regional so far, however, with sales continuing to go up in the northeast and Midwestern US, while sales were down by 29 percent in the western part of the country.

According to some analysts, if the inventory of unsold new homes continues to rise prices could be pushed down further. However, others warned that part of the February data could be an artifact of bad weather during the month and that it is premature to see the decline in new home sales as a trend.

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