Sales of new homes drop
Decline largest in U.S. in 13 years
March 1, 2007
BY JOHN GALLAGHER
FREE PRESS BUSINESS WRITER
Sales of new houses in the United States fell sharply in January, underscoring the continuing weakness in this crucial sector of the economy.
The U.S. Commerce Department reported that new-home sales plummeted by 16.6% compared with the month before. That was the largest decline since January 1994, when sales slid by 23.8%.
The decrease -- much steeper than analysts anticipated -- left sales at a seasonally adjusted annual rate of 937,000, the lowest level since February 2003.
As sales cooled, so did home prices.
The median sales price of a new home -- where half sell for more and half for less -- dropped to $239,800 in January, down 2.1% from the same month last year.
Bob Filka, chief executive officer of the 10,000-member Michigan Association of Home Builders, said his organization has lost about a thousand members in the past year due to builders and tradespeople downsizing or leaving the market.
"There are many of our members who have told me they've seen bad times before, but it's on the verge of being as bad as it's ever been," Filka said Wednesday. "We're just trying to get the word out that it's a great time to buy."
The latest available data on new home construction in southeast Michigan showed declines even worse than the national drop-offs.
Only 240 permits for new single-family houses were taken out by builders in metro Detroit in January, compared with 496 in January a year ago, 685 in January of 2005 and 804 in January of 2004, according to data compiled by the Southeast Michigan Council of Governments.
Meanwhile, sales of existing homes in Michigan were down 13.6% during 2006, and parts of metro Detroit saw even steeper declines.
Nationally, the figures suggest that residential construction would remain a drag on the economy.
Decline largest in U.S. in 13 years
March 1, 2007
BY JOHN GALLAGHER
FREE PRESS BUSINESS WRITER
Sales of new houses in the United States fell sharply in January, underscoring the continuing weakness in this crucial sector of the economy.
The U.S. Commerce Department reported that new-home sales plummeted by 16.6% compared with the month before. That was the largest decline since January 1994, when sales slid by 23.8%.
The decrease -- much steeper than analysts anticipated -- left sales at a seasonally adjusted annual rate of 937,000, the lowest level since February 2003.
As sales cooled, so did home prices.
The median sales price of a new home -- where half sell for more and half for less -- dropped to $239,800 in January, down 2.1% from the same month last year.
Bob Filka, chief executive officer of the 10,000-member Michigan Association of Home Builders, said his organization has lost about a thousand members in the past year due to builders and tradespeople downsizing or leaving the market.
"There are many of our members who have told me they've seen bad times before, but it's on the verge of being as bad as it's ever been," Filka said Wednesday. "We're just trying to get the word out that it's a great time to buy."
The latest available data on new home construction in southeast Michigan showed declines even worse than the national drop-offs.
Only 240 permits for new single-family houses were taken out by builders in metro Detroit in January, compared with 496 in January a year ago, 685 in January of 2005 and 804 in January of 2004, according to data compiled by the Southeast Michigan Council of Governments.
Meanwhile, sales of existing homes in Michigan were down 13.6% during 2006, and parts of metro Detroit saw even steeper declines.
Nationally, the figures suggest that residential construction would remain a drag on the economy.
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