March 23rd, 2011
Econintersect: The U.S. Census Bureau report indicates that new home sales continue to plummet, and median and average prices both hit a cycle low as well. The average price for a new home in the U.S. fell to $246,ooo. One year ago the average price was 15% higher. The median price was nearly 10% higher in Februry 2010, having fallen to $202,100. New home prices remain much higher than existing home prices. Follow up:
Follow up:NAR data released yesterday (see GEI Analysis - yesterday by Steven Hansen) reported median price in February for existing home sales to be $156,100. The problem for home builders is emphasized by the price discrepancy: Many buyers may not be able to justify paying nearly 30% more to buy a new home. And the construction cost for new homes is far above the current existing home sales prices, so home builders are currently unable to compete. Steven Hansen has reported at GEI Analysis - today that second derivative trends in new home sales, which have been positive for nearly a year, have turned negative.
Sources: U.S. Census Bureau and GEI Analysis (links in article)