Housing Sales Coming in for a Soft Landing
February 6, 2006,
The air continued to leak out of the housing bubble during December, further contracting what had been in recent years a red-hot real estate market and positioning it for a relatively soft landing and more sustainable levels of growth.
Sales of mostly moderately-priced existing homes, which account for the lion's share of the U.S. housing market, fell by 5.7%, to a seasonally adjusted level of 6.6 million units, the National Association of Realtors (NAR) reported. Sales of existing homes are now down 10.2% from a 13-month high of 7.4 million units recorded last June.
David Lereah, NAR chief economist, said, “This is part of the market adjustment we've been discussing, with a soft landing in sight for the housing sector. The level of home sales activity is now at a sustainable level, and is likely to pick up a bit in the months ahead.”
The most forward looking segment of the market, housing starts, tumbled by 8.9% to a level of 1.93 million units, due entirely to a big slide in starts of single-family homes, while starts of multi-family units actually increased. Single-family starts skidded down by 12.3%, while multi-family starts rose by slightly more than ten%, the U.S. Commerce Department reported.
Sales of generally more pricey new homes rose by 2.9%, but volume was mixed across the nation. Sales jumped up by 22.7% in Midwestern states -- but slumped by 23.3% in the Northeast. A gain of 11.1% in the West was partially offset by a dip of 2.6% in the South.
Housing By Region
Month-To-Month % Change, Dec. 2005
|EXISTING HOME SALES||HOUSING STARTS||NEW HOME SALES|
|Source: U.S. Department of Commerce and National Association of Realtors