Sales of new U.S. homes fell in February to its lowest level in nearly half a century, a bad omen for the housing market.
Sales of new homes and apartments are contracted by 16.9% last month, at an annual rate of 250,000 units, said Wednesday the Commerce Department. It was the third consecutive month of contraction and lower than the 700,000 that economists consider a healthy level.
New home sales now account for only 5% of all homes sold this year. In February there were only 186,000 new homes available, the lowest inventory in more than four decades.
The average price of a house or new apartment down almost 14% to $ 202,100, the lowest since December 2003. The average price is now 30% higher than the average price of existing homes, double the usual.
In response, manufacturers have reduced their selling prices while building cheaper houses. They also have to compete with those which reach the market through foreclosure, which reduced the prices of existing homes.
High unemployment, the credit crunch and uncertainty in prices to close its acquisition prevented many potential buyers.
"Falling house prices constrain demand for new homes and until that changes, the housing market remains in trouble, said Yelena Shulyatyeva analyst, firm BNP Paribas.
Last year was the fifth consecutive drop in new home construction. Economists believe it could take several years before sales recover substantially.
Lower sales of new homes get the workforce in the construction sector, which is usually one of the engines of economic recovery. Every new home creates an average of three jobs for a year and produce $ 90,000 in taxes, according to the National Association of Home Builders.
Sales of new homes and apartments are contracted by 16.9% last month, at an annual rate of 250,000 units, said Wednesday the Commerce Department. It was the third consecutive month of contraction and lower than the 700,000 that economists consider a healthy level.
New home sales now account for only 5% of all homes sold this year. In February there were only 186,000 new homes available, the lowest inventory in more than four decades.
The average price of a house or new apartment down almost 14% to $ 202,100, the lowest since December 2003. The average price is now 30% higher than the average price of existing homes, double the usual.
In response, manufacturers have reduced their selling prices while building cheaper houses. They also have to compete with those which reach the market through foreclosure, which reduced the prices of existing homes.
High unemployment, the credit crunch and uncertainty in prices to close its acquisition prevented many potential buyers.
"Falling house prices constrain demand for new homes and until that changes, the housing market remains in trouble, said Yelena Shulyatyeva analyst, firm BNP Paribas.
Last year was the fifth consecutive drop in new home construction. Economists believe it could take several years before sales recover substantially.
Lower sales of new homes get the workforce in the construction sector, which is usually one of the engines of economic recovery. Every new home creates an average of three jobs for a year and produce $ 90,000 in taxes, according to the National Association of Home Builders.
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