This isn’t entirely surprising:
NEW YORK (CNNMoney.com) — New home sales slipped to a nearly 13-year low in January, according to a key government report on the battered housing market.
January sales came in at a seasonally-adjusted annual rate of 588,000, the Census Bureau report showed, down 2.8% from 605,000 in December.
The reading was below the consensus forecast of 600,000, according to economists surveyed by Briefing.com, and was the lowest reading since the 559.000 rate reported in February 1995.
The median price of a new home sold in January was $216,000, down 15.1% from $254,400 a year earlier.
This decline probably doesn’t accurately capture the weakness in prices for new homes, as about three out of four builders have reported having to pay buyers’ closing costs or offer other incentives such as expensive features for free in order to maintain sales.
Prices have been driven down by the glut of new homes on the market. The report showed 195,000 completed new homes available at the end of the month, bringing total inventory - including new homes under construction and not yet started - to 482,000, equal to just below a 10-month supply.
It’s going to be a few years before this settles down.
