New Home Sales Fell Sharply in August

Daily Forex Fundamentals | Written by Wachovia Corporation | Sep 25 08 14:50 GMT |

New home sales fell to 460K, their lowest level since 1991, and the steepest pace of decline since late last year. We had seen an easing in the pace of decline over the past few months, but clearly this month suggests that may not hold. Still, sales activity can be volatile and lower mortgage rates in September may help the next release. Sales Drop Sharply Sales fell as sharply as they have since November 2007, and reached levels last seen in the 1990-91 recession. Sales fell in three of the four census regions, with the sharpest fall in the West. Sales in the West region fell 44,000 on the month as builders continue to cut inventory in some of the hardest hit markets in the country. Inventory Continues to Improve The only silver lining in the report may be the improvement in the level of inventories. Inventory has been falling sharply, off a total of 50K in the last three months. Builders continue to aggressively curtail speculative building as well as current inventory. With the pressure to improve balance sheets, builders should continue to try to move inventory. Wachovia Corporation http://www.wachovia.com Disclaimer: The information and opinions herein are for general information use only. Wachovia Corporation and its affiliates, including Wachovia Bank, N.A., do not guarantee their accuracy or completeness, nor does Wachovia Corporation or any of its affiliates, including Wachovia Bank, N.A., assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice, are for general information only and are not intended as an offer or solicitation with respect to the purchase or sales of any security or any foreign exchange transaction, or as personalized investment advice. Securities and foreign exchange transactions are not FDIC-insured, are not bank-guaranteed, and may lose value.