Purchases of new homes in the U.S. unexpectedly fell in February for a second month, a sign the recovery in the housing market may be uneven.
Sales dropped 1.6 percent to a 313,000 annual pace, the slowest since October, from a 318,000 rate in January that was weaker than previously reported, figures from the Commerce Department showed today in Washington. The median estimate of 78 economists surveyed by Bloomberg News called for 325,000.
Sales of new homes are struggling to gain momentum amid increasing competition from foreclosures, which are hurting all property values. Nonetheless, a pickup in hiring, growing incomes and mortgage rates near a record low are making all houses more affordable, which may help underpin the market.
Economists’ estimates ranged from 310,000 to 350,000. The rate for January was previously reported at 321,000.
The recent slowdown in demand has pushed up the amount of time it takes to sell a new house. There were 150,000 new houses on the market at the end of February, matching the prior month’s record low. The supply of homes at the current sales rate climbed to 5.8 months’ worth from 5.7 months in January.
Purchases, tabulated when contracts are signed, fell in two of the four U.S. regions, led by a 7.2% drop in the South. Sales fell 2.4% in the Midwest and rose 14% in the Northeast and 8% in the West.
The regional breakdown affected prices as demand fell in the South and Midwest where homes are less expensive and rose in the Northeast and West where they are costlier.
The median sales price increased 6.2% in February from the same month last year to $233,700 U.S., today’s report showed.
New-home sales have lost their ability to forecast the broader market as demand shifts to previously owned houses. Purchases of existing homes are calculated when a deal closes about a month or two later. New properties made up almost 7% of the market last year, down from a high of 15% during the last decade’s housing boom.
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