Another nasty batch of housing figures came out Thursday: the government reported that new home sales hit a record low in January, falling 10 percent from December and nearly 50 percent from a year earlier.
Here's what Ian Shepherdson, chief US economist at High Frequency Economics, had to say about the numbers in a report of his own:
We thought December's rise in mortgage applications and the upt- ick in buyer traffic reported by the NAHB survey might be [reflected] in a modest rise in sales, but alas not. We do think, [though], that sales are now very close to their floor. Activity has been compressed from near 1.4M at the peak to just 0.3M, so it can't fall much further; sales will not drop to zero. The [absolute level] of inventory continues to fall, down 29.9% y/y, but because sales are falling even faster the months supply is still rising, up to 13.3 in Jan from 12.2 in Dec. This will keep [prices] falling for the rest of this year at least.