Supply of unsold new homes in US declined in March
In what has been discovered to be the biggest decline in nearly half a century, official data showed that the supply of unsold new homes in US declined in March. Hence, it seems that US housing market, which has been the very epicentre of recession, may be stabilizing.
Many analysts are now asserting that the maybe the bottom is being formed in housing because even the supply of homes, the inventories have declined. Builders seem to be holding off on adding new homes as they work on decreased supply. This is substantiated by the fact that applications for permits to build new homes were off 8.5 percent in March from February and 44.6 percent from March 2008, and this has led to reduction in inventories.
Inventory levels have dropped by an overwhelming 33.7 percent since March 2008. The supply of homes available for sale came down to 10.7 months worth in March from the 11.2 months recorded in February. Analysts are optimistic in declaring that on a moving average basis, this is a gradual improvement from very low numbers in new home sales.
While the median new home price dropped from $208,700 to $201,400, there were still few takers despite the increasing affordability. However, the growth in sales recorded in February has been good and has been revised to a higher figure of 8.2 percent as against the 4.7 percent previously announced.