New Home Sales Fall 0.6%

The Commerce Dept. reported Friday sales of new homes in March ’09 came in at a seasonally adjusted annual rate of 356,000 vs 340,000 consensus. This is 0.6 percentage points below the revised February rate of 358,000 and is 30.6% below the March ’08 estimate of 513,000. The Y/Y drop in inventory was 33.7%, the largest plunge on record.

The median sales price of new houses sold in March 2009 was $201,400; the average sales price was $258,000.

The seasonally adjusted estimate of new houses for sale at the end of March was 311,000. This represents a supply of 10.7 months at the current sales rate.

While the sales of new homes dipped in March, there were signs of improvement in the housing market. Revised numbers for February show new home sales were actually up more than 8% vs. the 4.7% initially reported. Furthermore, the 5.2% drop in inventory suggests it would now take less than twelve months to sell the current inventory of new homes – which is one of the keys to a turnaround in the housing market – since new construction will only pick up after the new homes sitting empty are sold. All in all it was a positive report.

In a separate report, the Commerce Department also today said that orders for durable goods decreased in March $1.3 billion or 0.8% versus a consensus expected -1.6%, the seventh decline in the past eight months. The most significant detail in the report is the fact that orders for core capital equipment goods rose 1.5%, the second straight increase.

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