The December existing home sales report shocked everyone when it showed an increase over 6 percent, however, the new home sales report was not quite as optimistic. The new home sales report showed more of the same, a drop in sales activity and an increase in inventory. Tim Iacono from The Mess That Greenspan Made dives deeper into this report in his blog post below.
The Census Bureau reported(.pdf) new home sales fell to record lows in December and, after revisions to prior months' data (as shown below), inventory has skyrocketed.
New home sales plunged 14.7 percent from November to a seasonally adjusted annualized rate of just 331,000 units and downward revisions to prior months' data totaled another 40,000 pushing the inventory of unsold homes to 12.9 months of supply, also a record.
For the entire year of 2008, new home sales totaled just 482,000 units, a decline of 38 percent from 2007, to the lowest level in 26 years.
The median price for a new home plunged 6.0 percent, from $219,700 in November to $206,500 in December, and is now down 9.3 percent on a year-over-year basis.
This post can also be viewed on themessthatgreenspanmade.blogspot.com.