New Home Sales Rise Less than Expected

New Home Sales measures the number of new single-family homes that were sold during the prior month; this report is somewhat strongly correlated to Existing Home Sales. XHB The Survey states that 313 thousand new single-family homes were sold in February. This is lower than the 325 thousand expected by analysts. This is essentially bearish for the U.S. housing market. From the report, sales of new single-family houses in February 2012 were at a seasonally adjusted annual rate of 313,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 1.6 percent below the revised January rate of 318,000, but is 11.4 percent above the February 2011 estimate of 281,000. The median sales price of new houses sold in February 2012 was $233,700; the average sales price was $267,700. The seasonally adjusted estimate of new houses for sale at the end of February was 150,000. This represents a supply of 5.8 months at the current sales rate. An increase in new homes sold implies a healthy housing market. According to the multiplier effect, housing has an impact on the rest of the economy. Increases in homes sold suggest increased household income and in turn an economic expansion, and visa versa.