Sales of new U.S. homes declined for the second consecutive month in February, and the nation’s supply of unsold homes continued to rise, an indication that the weak housing market has yet to hit bottom.
The Commerce Department reported yesterday that sales of newly constructed single-family homes fell 3.9% last month to an annual pace of 848,000 units. That rate was 18.3% below a year earlier and followed a decline of 16% in January from the previous month.
“There is no question that after thinking we had a stabilization of new-homes sales late last year, we are in another down leg,” said David Seiders, chief economist for the National Association of Home Builders. “I think fundamental demand has weakened.”
Last month’s sales pace was likely chilled by snowstorms in the Northeast and Midwest, where sales plunged. But some economists said the recent pullback by subprime-mortgage lenders — companies that make home loans to people with weak credit — may also be driving down demand. And the decline is occurring just as the critical spring selling season gets under way.
Among the nation’s large publicly traded home builders, the percentage of homes sold to subprime borrowers varies widely. The builders say they don’t track all subprime mortgages — only those made through their in-house mortgage units.
KB Homes also reported that its profit was only $27 million in the last quarter as opposed to $173 million a year ago. Thats some significant slowdown!
As if that wasn’t enough, CNN Money reports that foreclosures are increasing very fast.
The once red-hot Florida housing market leads the nation in delinquencies, according to the latest report on foreclosure filings from RealtyTrac, an online marketer of foreclosure properties.
There were more than 19,144 properties in some stage of foreclosure in February in the Sunshine State, up 63.5 percent from January and nearly double the number a year earlier.
In addition to Florida, other once-hot markets showing weakness include California, where filings shot up nearly 79 percent compared with a year ago, and Nevada, which for the second straight month had the nation’s highest foreclosure rate relative to the number of households.