New Home Sales Fall

- New Home Sales for February fell to 848K versus estimates of 985K and 882K in January.

BOTTOM LINE: New-home sales in the US unexpectedly fell in February, Bloomberg reported. The median price of a new home fell .3% last month to $250,000 from $250,800 the prior month. The Home Affordability Index is now at the best levels in 20 months, which is helping to stabilize pricing. The supply of homes at the current sales pace rose to 8.1 months’ worth, compared with 7.3 months in January. Purchases fell 26.8% in the Northeast, 7.0% in the South and 20% in the Midwest. Sales soared 24.6% in the West. New home sales for February are more a refection of the activity in February than the recent strong existing home sales report, which reflected more January activity. February saw record cold temperatures and storms, while January weather was relatively mild. It is interesting to note the strong new home sales figure for the West, which was the least affected by the weather. I expect new home sale to bounce back sharply this month.