New Home Sales Continues Its Decline

The beat goes on with new home sales. From Market Watch:

Sales of new homes dropped 8.3% in August to a seasonally adjusted annual rate of 795,000, the slowest sales pace since June 2000, the Commerce Department estimated Thursday.

Sales are now down 21.2% in the past year, with no sign of a bottom in the crippled housing market. "This is just hideous," wrote Ian Shepherdson, chief U.S. economist for High Frequency Economics.

"This is more evidence that it's going to be a long and -- for a lot of people -- a painful process," said Mike Schenk, economist for the Credit Union National Association. "The soft housing market will be with us for a long time, at least 18 months."

The median sales price fell 7.5% to $225,700 compared with a year earlier, the largest year-over-year decline in 37 years. The median price can be affected by the mix of homes sold between and within regions, and the price does not include nonmonetary incentives, such as upgrades, free vacations and new cars.

The inventory of unsold homes fell by 1.5% to 529,000, the fifth straight decline as builders struggle to bring their inventories down. The inventory represents an 8.2-month supply at the August sales pace, the highest since March.

On Tuesday, the National Association of Realtors said sales of existing homes fell to a five-year low in August, while inventories jumped to an 18-year high.

Total home sales -- existing and new -- fell 5% in August to a seasonally adjusted annual rate of 6.30 million, the lowest in six years.

The government cautions that its housing data are subject to large sampling and other statistical errors. Large revisions are common. The standard error of 12.4% is so high, in fact, that the government cannot be sure in most months whether sales rose or fell. (my emphasis)

Sales rose 42.3% in the Northeast to 74,000 annualized and rose 20.5% in the Midwest to 135,000. Sales fell 20.8% in the West to 179,000 and fell 14.7% in the South to 407,000, the lowest in five years.