Demand for Existing Houses Falls
Sales of new houses fell by 3.3% in February, but the January-February average was roughly the same as the fourth-quarter adjusted annual rate, the National Association of Home Builders says in a new “Eye on the Economy” newsletter.
Sales of existing houses has dropped sharply in recent months. Drawing on information gathered by the Census Bureau and the Department of Housing and Urban Development, NAHB chief economist David Crowe writes that new-home sales have increased by 18% since last July, while the sale of existing single-family homes has fallen by 15%. In February, existing home sales were off 0.4%.
“This weakness in existing home sales can be expected to continue,” Crowe says. “The NAR Pending Home Sales Index–a useful indicator of future sales voume–decreased 0.8% in February, marking eight months of decline.”
Construction spending also has slowed. After three consecutive months of increases, total private residential construction dropped by 0.8% from January to February. Still, it was over 13% higher than a year ago.