While recent new home sales numbers appear to be great, they really aren't as wonderful as everyone is making them out to be. As Tim Iacono points out in his blog post below, even with the huge increase in sales, we are still at near record lows - so there is a long way to go before we can talk about a real estate recovery. For more on this, continue reading Iacono's post...
The Commerce Department reported(.pdf) that new home sales rose 17.5 percent in December, up from an annual rate of 280,000 in November to 329,000, but, the increase comes from near record low levels, meaning that, this surge doesn’t amount to much.
As shown above, new home sales are just a tiny fraction of what they were a few years ago, now running at about a third of the historical average as distressed property sales at much lower prices are expected to dampen demand for new homes for the foreseeable future.
This post was republished with permission from The Mess That Greenspan Made.