New home sales plunge 10.5 percent, sharpest drop in nearly nine years

RAW STORY
Published: Friday March 24, 2006

New-home sales recorded the steepest drop in nearly nine years during February, marking the fourth decline in six months and providing more evidence of a continuing slowdown in the housing market, the WALL STREET JOURNAL REPORTS -- excerpts:

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The Commerce Department said Friday that sales of single-family homes decreased 10.5% to a seasonally adjusted annual rate of 1.080 million. The decrease was the biggest since an identical slide in April 1997. The level of demand was the lowest since May 2003's 1.078 million annual rate.

January sales fell a revised 5.3% to a seasonally adjusted annual rate of 1.207 million; originally, January sales were seen at 1.233 million. Sales rose 3.1% in December, dropped 8.0% in November, climbed 7.7% in October and slipped 2.0% in September.

The average price of a home increased to $296,700, up from a revised $287,200 in January. The median price fell to $230,400 from a revised $234,200. There were an estimated 548,000 homes for sale at the end of February -- a 6.3 months supply at the current sales rate and the highest inventory level since January 1996's 6.4 months supply. An estimated 525,000 homes were for sale this January, a 5.3 months' inventory.