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New-Home Sales Fall in February for Second Straight Month

New-homes sales fell 1.6 percent in February to a seasonally adjusted annual rate of 313,000, the second straight monthly decline, the ""Commerce Department"":http://www.commerce.gov/ and ""HUD"":http://portal.hud.gov/hudportal/HUD jointly reported Friday. Sales for January were revised downward from 321,000 to 318,000.


The median price of a new home in February jumped to $233,700 from $215,700. The median price in February was the highest since last June when the median price hit $240,200.The median price in February was 6.2 percent higher than February 2011.

About 64 percent of new homes sold in February carried prices of $200,000 or more compared with 59 percent in January.


Sales in February were up 11.4 percent from February 2011 but down 77.5 percent from the July 2005 peak of 1,389,000. Over the past 18 months, new home sales have averaged just 307,000, remaining within a range of 281,000 to 336,000.

The sales declines in January and February came despite a reported increase in buyer traffic according to the monthly survey of the ""National Home Builders Association"":http://www.nahb.org/ (NAHB).

The NAHB's Housing Market Index, considered a measure of builder confidence, was revised downward for February from an originally reported gain and was flat in March.

Sales improved on a seasonally adjusted annualized basis in the Northeast and West, but plunged in the South and edged down in the Midwest.

Unlike the report on existing home sales which is based on completed transactions (closings), new home sales report is based on contracts signed which could be cancelled.

According to the Commerce Department, the inventory of homes available for sales was flat at 150,000. The months supply of new homes for sale increased in February to 5.8 from 5.7 in January but down from 7.8 in February 2011.

The February sales pace compared with the Commerce report last week that builders completed 421,000 new homes in January, suggesting an increase in inventories and further downward pressure on new home prices.

About Author: Mark Lieberman

Mark Lieberman is the former Senior Economist at Fox Business Network. He is now Managing Director and Senior Economist at Economics Analytics Research. He can be heard each Friday on The Morning Briefing on POTUS on Sirius-XM Radio 124.

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