New-home sales fell to a record low in January. The Commerce Department reported Thursday that sales fell 10.2% to a seasonally adjusted annual rate of 309,000. This is the worst number on record since 1963. It was a weaker number that economists had expected, which was 330,000. One bright spot was the Northeast, which saw sales rise in January from the previous month.
It falls into place that with nationwide sales continuing to fall, existing inventory increased to a record high. The Government said it would take 13.3 months at the current sales pace to exhaust supply.
The Obama administration’s plan to spend $75 billion to keep up to 4 million U.S. homeowners out of foreclosure should start to stabilize the situation, hopefully! We like the $8000.00 first-time home buyer tax credit. It should help to lure home buyers back to the market when prices stabilize. The fact is that right now builders are stopping home construction because foreclosures dump more properties on the market, creating unbearable gluts of supply.
As economics 101 states, in the long run, the reduction in new projects should aid the housing market’s recovery as fewer properties for sale help increase competition and stabilize prices. This is probably still a ways off from materializing though. Keep your chins and tools up!!
Have you guys ever thought about starting up a forum or something just for out of work construction guys to network on? I think it would be very helpful!