MercoPress. South Atlantic News Agency

Sales of new homes in US drops for second month running

National Association for Bussines Economics

Sales of new homes in United States dropped for the second month in a row this year, 15.8% in January and 3.9% in February, according to the Commerce Department.

The latest data puts the annual rate of new home sales at 848,000 - the slowest pace since June 2000 (with 793.000). The lower-than-expected figure adds to concerns that the US housing market is unlikely to recover soon, amid an oversupply of homes on the market. Market analysts were forecasting sales of 985.000 following 937.000 in January. This means that the supply of new houses increased to 8.1 months, the highest level since 1991 and up from 7.3 months in January. Apart from the Western region of the US, which saw sales up by 25.8%, all other regions saw home sales fall. The most extreme fall was seen in the Northeast - down 26.8%. In the Midwest they dropped 20% and 7% in the south. Economists were expecting that with a mild winter sales of new houses in February would have reacted as happened with second hand homes. Last Friday a private group the National Association of Realtors revealed that the sales of second hand homes jumped unexpectedly 3.9% in February, reaching an annual 6.69 million sales. The latest figures follow recent forecasts that the number of new homes will drop by 15% this year, well beyond an earlier prediction of a 5% decline. The National Association for Business Economics poll suggested a worsening of the housing market, following a slowdown over the past year The latest figures had a negative impact in Wall Street which believes the real estate market remains weak.