New home sales set a new all-time low with sales running at just a 331,000 unit pace. A net revision for the last three months took 40,000 units out of the pace of sales as well. With consumers stressed on many fronts it is not surprising that we are seeing a pullback in home sales, but this pace of decline is unprecedented.
Sales Dropped Sharply
* Sales of new homes fell 14.7 percent in December, and are nearly 45 percent off of their year-ago pace. A weak economy coupled with the problems we have had for several years may continue to put downward pressure on sales. However, lower interest rates and talk of further help from Washington may mean a bottom comes sooner rather than later.
Inventory & Prices Dropped Further
* The inventory of homes for sale dropped by 40,000 in December, however the November level was revised higher and what had been a major drop was all but erased. Inventories are definitely improving but we have some question about just how quickly.
* Prices will likely continue to fall through this year.