New Home Sales Drop to Lowest Level Since 1995

Washington, D.C.–New home sales fell 1.8 percent in February to a 13-year low, according to the Commerce Department.New home sales declined to a 590,000 annual pace. Home purchases fell 30 percent from the same period a year ago. Economists had expected new home sales to drop to a 578,000 annual pace, Bloomberg said. January purchases were revised from an estimated 588,000 pace to 601,000.Two of the four regions saw a decline. The Northeast showed a 40 percent drop–its biggest since 1996. In the South and West, sales were higher.The Commerce Department report also said that the housing inventory showed a slight decrease. The number of new homes for sale at February’s close fell to 471,000, the smallest amount since July 2005. The decline indicated that builders are beginning to reduce the large U.S. housing inventory. However, the housing supply remains at 9.8 months, which is the highest level since 1981.The high inventory is helping to reduce prices of unsold homes, causing the median home price to drop 2.7 percent to $244,100 from February 2007.