| February’s New Home Sales Not as Good |
| Written by Jonathan Smoke | |
| 03.26.2008 | |
Discuss this article on the forums. (0 posts) The Commerce Department released the preliminary new home sales for February today. The data revealed a small decline over January, roughly in line with what economists predicted but certainly not the uptick that the existing home sales data revealed on Monday for the same period.Digging into the data, new home sales for February were at a seasonally adjusted annual rate of 590,000 homes, which was 1.8% below the January rate of 601,000 homes. It should be noted that since this data is based on survey samples conducted by the Census Bureau, such a small percentage change is not statistically significant. Despite the minor decline, the months’ supply of new homes remained at 9.8, which is where it was in January. So while the sales pace declined, the gross inventory level fell 2% as a result of more homes being sold than started. While the months’ supply of new homes is relatively high, it’s being impacted by the relatively low pace of sales. In terms of sales metrics, the new home sales data should be more of a leading indicator than existing home sales as new home sales reflect contracts. Therefore, it would have been much better to see a convincing uptick in new home sales for February. However, as I pointed out, the slight fall is not statistically significant and given the likelihood of seeing revisions to this figure, it may turn out to have been flat or higher. Regardless, by not being positive, the new home sales figures were a bummer. On the cheery side of leading indicators, Beazer Homes reported results of a nationwide survey of 1,006 adults today. According to their commissioned survey, 16% of respondents reported plans to buy a home. According to Beazer, that figure was up 45% over a similar survey conducted in January. Beazer created a video “news story” of the survey results. Click here to view it. 
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