New Home Sales in U.S. Unexpectedly Decline, Capping Worst Year on Record

[Purveyor]

By Bob Willis

Jan. 27 (Bloomberg) -- Sales of new homes in the U.S. unexpectedly dropped in December, capping the worst year on record and signaling the government’s tax-credit extension has yet to shore up demand.

Purchases declined 7.6 percent to an annual pace of 342,000, marking the fourth decrease in the past five months, the Commerce Department said today in Washington. For all of 2009, sales declined 23 percent to 374,000, the lowest level since records began in 1963.

The falloff following the expected expiration of an $8,000 incentive for first-time buyers indicates the market remains dependent on government assistance. A setback in housing, combined with a jobless rate projected to average 10 percent this year and record foreclosures that will push up supply, may pressure home prices and builder profits for much of 2010.

“It’s going to be a long slog for housing,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc., a New York forecasting firm. “We will see a decline in home prices and there is still a lot of shadow inventory out there that we need to get through.”

Economists anticipate Federal Reserve policy makers, meeting today to discuss the direction of interest rates, will stick to a pledge to phase out programs aimed at keeping mortgage rates low, bringing an end to another form of government help.

More...

http://www.bloomberg.com/apps/news?pid=20601087&sid=a3axwguC00HA&pos=2

[CanonRay]

1. We're turning the corner!!!

Which corner, I'm not sure :shrug:

[DJ13]

2. The corner is fine

Its the cliff on the other side of the building that we should be worried about.

[Subdivisions]

3. Unexpected? For whom? I'm just some Joe Sixpack on the Internet but

even I don't see such a development as "unexpected".

Give me a fucking break.

[GreenPartyVoter]

5. You have the perfect nick for being in this discussion, and I couldn't agree with you more.

[Subdivisions]

8. I'm so goddamned sick of the spin and manipulation and pure propaganda. Really. n/t

[Ex Lurker]

4. wasn't there unusually severe weather across most of the country in December?

people don't go house hunting in a blizzard.

[alstephenson]

6. Unexpected??? Why would people be buying new homes...

or more importantly why would developers be BUILDING new homes, when there's a surplus of existing homes for sale??? Many of which are foreclosures or short sales at better prices?

[Subdivisions]

9. I have no idea how anyone could feel secure enough in their job

over the long-term, say the term of a 30-year mortgage, and in housing market stability to actually sign the dotted line for the purchase of a house. There's no way in hell I would enter into such a contract under the circumstances.

[Loge23]

7. There's not a lot of optimism out there.

So many of us are looking for some silver lining here in the third full year of declines.
Unfortunately, it has been an absolutely horrendous winter so far in every way.
If some palpatable sense of demand/activity does not return with warmer weather I'm afraid we'll see yet another avalanche of foreclosures, unemployment, and misery. We're all hanging on.
Everybody I talk to seems to agree that we're in a zone that we just haven't seen before - economically speaking.
How low can we go?

[dgibby]

10. There are 12 houses for sale on my street as I type.

Most of them have been on the market for at least 6mo. I'd like to move back to Va, but there's little hope of that in this market, unless I sell to a flipper for what I owe and just walk away. My other alternative is to auction it off with a set pre-determined minimum.

[RedCloud]

11. How about some more pseudo efficient energy homes?

Scalp that soil. Save those nails. All to keep the Home Depots busy as you "enjoy" your maintenance free home.