New-home sales tumble to record low pace

Source: 27 February 2009 Business section Milwaukee Journal Sentinel

New-home sales tumbled to a record-low annual pace in January, and there’s no relief in sight as mounting damage from the collapsed housing market pushes the country deeper into resession.  The Commerce Department reported Thursday that sales fell 10.2% to a seasonally adjusted annual rate of 309,000, the worst showing on records going back to 1963.  It also was weaker than the pace of 330,000 that economists expected, and shattered the previous all-time monthly low set in September 1981.

My take is that fewer new starts will help draw down the active market inventory and help stabilize housing prices.  However, if people keep loosing their jobs and retirements at a record pace we may have a way to go before finding the bottom of the housing market.  I am simply amazed at the number of great buys out in the market.  It seems as if the great buys are the only things that are moving.  The government throwing in $8,000 for 1st time home buyers should further help soak up excess inventory at the lower price points.  Finding qualified home buyers has been a difficult task given the constant changes in lending requirements.  Interest rates also continue to head lower making it attractive to buy or refiniance.  I can’t help but believe that with all that is happening things are starting to turn.  Think of a huge oil tanker coming into port vs. a 20 foot speed boat.  We may not notice the directional changes in the midts of taking corrective actions until after some time.  Steady and patience may be hard to come by especially for those that have been patient since this all started.  I just want to believe that the wait is almost over.  Only time will prove me right.