50 Year Low for New Home Sales
Five short years ago new home sales were at an all time high. No More. The effects of the collapse of the housing bubble four years ago are continuing to be felt, with Americans on track to buy fewer new homes in 2011 than in any year since the government began keeping track nearly a half-century ago. The Commerce Department said Wednesday (May 23rd) that sales of new homes fell in February to an annual rate of 250,000 for the third straight monthly drop, on a pace far below what economists consider a healthy rate of about 700,000 a year. Last year, 323,000 new homes were sold, making it the worst year on record and marking the fifth straight year of declines. The high rate of foreclosures is forcing prices down for previously occupied homes even faster than they're falling for new ones, making buyers less likely to purchase a new home. New homes have accounted for just five percent of all home sales so far this year, down from the typical rate of closer to 15 percent.