New-home sales plunged in February to record low

The number of people buying new homes plunged in February to the fewest on records dating back nearly half a century, a dismal sign for an already-weak housing market.

New-home sales fell 16.9 percent last month to a seasonally adjusted annual rate of 250,000 homes, the Commerce Department said Wednesday. It's the third straight monthly decline and far below the 700,000-a-year pace that economists view as healthy.

The median price of a new home dropped nearly 14 percent to $202,100, the lowest since December 2003. The median is now 30 percent higher than the median price of resold homes -- twice the markup typical in healthy housing markets.

Builders have struggled to compete with a wave of foreclosures that has lowered the price of previously occupied homes. High unemployment, tight credit and uncertainty over prices have also kept many potential buyers from making purchases.

Read Full Article from Los Angeles Times

- Posted: 2011-03-23 10:32:39

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