New Home Sales Increase from Record Lows

February new home sales increased from record lows reached the previous month, but remain significantly below year-earlier levels, the Commerce Department said Wednesday:

Sales of new one-family houses in February 2009 were at a seasonally adjusted annual rate of 337,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 4.7 percent (±18.3%) above the revised January rate of 322,000, but is 41.1 percent (±7.9%) below the February 2008 estimate of 572,000.

Some other key stats:

1. The median home sales price was $200,900, that's a nearly 3 percent drop from January and 18 percent from a year earlier.

2. The total number of unsold new homes fell to 330,000, from 340,000 in January. This figure has fallen for each of the past 22 months.

3. The months' supply of unsold homes fell from a record high of 12.9 to 12.2--which is the second highest level ever.

4. "The median time it took to sell a new home increased 0.4, to 9.8 months—the highest reading since July 1982," Patrick Newport, US economist for IHS Global Insight, said in a report.

So does the report signal that a housing bottom is in sight? From Newport's report:

This is the fifth "better than expected" housing report released in the past eight days. Housing starts and permits, and existing home sales in February surpassed the consensus projection. Mortgage applications in the latest survey week, according to the Mortgage Bankers Association, jumped 32%. And the monthly FHFA purchase-only House Price Index (HPI) rose 1.8% in January. On top of this, the 30-year fixed mortgage rate that Freddie Mac tracks, which will be released tomorrow, has likely dropped to an all-time weekly low (data start in 1971). Has housing hit bottom?

It is much too soon to make this call. Recent housing numbers were influenced by weather. December and January were colder than normal in the Northeast and Midwest, and February was warmer than normal in the Northeast, and about normal in the Midwest. Temperature swings will swing the housing numbers, and the seasonal adjustment factors will augment these swings. On top of this, February was the eighth driest February in the 1895—2009 period, according to the National Climatic Data Center, the government agency within NOAA that monitors climate. Drier than normal weather during the winter months can also make the housing numbers spike.