New home sales increased 4.7% this month, an encouraging indicator in an oversupplied real estate market. The Wall Street Journal reports:
WASHINGTON — New-home sales climbed for the first time in seven months during February, another favorable sign for the housing sector, but the data also showed prices tumbled. Sales of single-family homes increased by 4.7% to a seasonally adjusted annual rate of 337,000, the Commerce Department said Wednesday. January new-home sales plunged 13.2% to an annual rate to 322,000; originally, the government said January sales fell 10.2% to 309,000.
The unexpected increase marked another hint of stability in housing, long suffering from the boom in the early part of the decade. The government last week said home construction in February increased 22.2% to a seasonally adjusted 583,000 annual rate. And realtors this week reported existing-home sales advanced last month.
A glut of unsold houses on the market has forced prices lower. But inventories are coming down. At the end of February, there were an estimated 330,000 homes for sale. That’s below the 340,000 for sale at the end of January. The ratio of houses for sale to houses sold dropped to 12.2 from January’s 12.9.
Regionally last month, new-home sales increased 6.6% in the West and 9.7% in the South. Sales fell 9.1% in the Midwest and 3.3% in the Northeast. An estimated 27,000 homes were actually sold in February, up from 23,000 in January, based on figures not seasonally adjusted.
Note that home sales are still down 40% from last year. Calculated Risk says sales are just above a record low.
The news is light years from bullish, but in this market, anything good is worth printing.