February New Home Sales Show A Suprise Increase Of 4.7%

In a surprise turn around, February new homes sales posted a 4.7% increase. While this sounds like good news, sales for the month were the second worst on record dating back to 1963. February sales were still down 40% from the same period in 2008. Also noted the median sales price fell to $209,000 which is an 18% drop from the same period last February.

 

So what are the numbers telling us? First we see that first time home buyers are starting to get out and look at homes. With the new tax incentive of $8000 for first time home buyers and interest rates at historic lows, Home Buyers are taking notice. There is also an increase in foreign investment. Investors are looking to the stable U.S. economy as a sound market to invest in Real Estate while prices are at rock bottom.

 

While the numbers housing starts seem to be positive for February, we are far from out of this housing crisis. We are still faced with a huge inventory of foreclosed properties that continue to drag down the Real Estate market. The lingering recession has caused many Americans to tighten up their belts with spending. And banks have been reluctant to lend money to help spur growth in the economy.  Only with a swift end to this recession can we expect a lasting recovery in the housing sector and a return to normal growth.