The first two months of new-home sales in 2007 have fueled concern over a flagging housing market.
The February 2007 data, released by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, put the estimated annual rate at 848,000. Since the data is seasonally adjusted, the most useful comparison is with February 2006, when the annual rate was more than 18% higher, at 1,038,000. Even considering the margin of error of more than 12%, that's a substantial decrease. February's release revised the January rate to 882,000, which is nearly a 25% decrease from a year before.
In a March 26 press release, David Seiders, chief economist for the National Association of Home Builders, cited unfavorable lending conditions as a major cause of the downturn. The release also noted the worrisome fact that such a slump was occurring while conditions other than mortgage rates — improved affordability, for example — are favorable.
Data from the government wasn't available for March as of press time, but anecdotally, at least, things didn't appear to be picking up. Fort Worth, Texas-based D.R. Horton — the nation's largest home builder — reported sales of 9,983 homes in its second fiscal quarter of 2007, which ended March 31. That's a decrease of more than one-third from the same quarter of 2006.