The Marketwatch headline today? New-Home Sales Inch Higher in March:
Boosted by warmer weather in the Northeast and Midwest, sales of new homes increased by 2.6% in March to a seasonally adjusted annual rate of 858,000, the Commerce Department reported Wednesday.
That is of course month-over-month. Year-over-year, [YOY] sales are down 23.5%. According to the Commerce Department:
Sales of new one-family houses in March 2007 were at a seasonally adjusted annual rate of 858,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.6 percent (±12.9%)* above the revised February rate of 836,000, but is 23.5 percent (±7.9%) below the March 2006 estimate of 1,121,000.
This would be the worst March since 1998, when sales were at 836,000.
Also note the margin of error. 2.6% (±12.9%) would indicate no confidence at all that there even was an improvement in MOM sales. 23.5% (±7.9%) however, would indicate that you can be pretty darn sure sales are down YOY. In addition, as is generally the case, the Commerce Dept. revised the previous month’s figures. February’s less than sunny numbers were revised downward from 848,000 to 836,000.
Marketwatch also reported:
[Increased market share by luxury homes would skew the median upward without "same house" appreciation.]
The median sales price rose 6.4% year-over-year to $254,000, as luxury homes continued to increase their market share.
Inventory is up only marginally from last month, with a reported 545,000 units. This does represent a 1.4% drop from last year. However, with diminished sales, this represents a 7.8 month supply as opposed to a 5.5 month’s supply in March 2006.
Supply remains high as demand remains low. The median price may be up, but that is not a trend I would expect to continue. In addition, the median increase is not adjusted for inflation. Prices also now include a greater number of incentives than a year ago, masking the actual appreciation rate. Market conditions will continue to put downward pressure on prices.