New Home Sales Heading Wrong Way (XHB, ITB)
New home sales in December went back the wrong way, which was largely expected considering the data we had already seen from the housing sector in the last week. The problem is that the drop in new home sales was…
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The November data was revised to 370,000 annualized versus 355,000 originally reported. One issue which may highlight the weak housing market is that the annual supply rose to 8.1 months in December from a revised figure of 7.6 months. As supply grows, the more empty houses are sitting on the market that act as competition for those who want to sell a home. Still, the data is somewhat mixed there as the inventory figure was put at 231,000 homes for sale versus a prior 235,000. The full-2009 data for new home sales was down almost 23% to an unadjusted figure of 374,000 from the 485,000 recorded in 2008.
The drop was expected because of the channel of house closings being so high in October and November ahead of what many buyers feared would be the end of the first time home buyer tax credits. That has been extended through April.
After the news, SPDR S&P Homebuilders (NYSE: XHB) is down 0.7% at $14.99 and iShares Dow Jones US Home Construction (NYSE: ITB) is down 1.2% at $12.05.
JON C. OGG
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