Top Business News
Debate Over: Housing Turnaround a Fantasy
Jeanine Poggi
05/28/09 - 11:53 AM EDT
Optimism in the housing market is futile.
After weeks of back and forth debates about whether or not the housing market had finally bottomed, today's disappointing new home sales data would seem to prove that a turnaround is far from imminent.
New home sales were flat in April at 352,000, missing economists' expectations of 360,000 units.
The news sent shares of home builders tumbling in morning trading: Ryland(RYL Quote) tanked 11% to $16.96, Hovnanian(HOV Quote) sank 7% to $2.67, Pulte Homes(PHM Quote) fell 6.5% to $8.77, and Centex(CTX Quote) dropped 7% to $8.37.
Median sales price dropped 15%, to $209,700, from a year earlier, but was up 3.7% from March. Prices are expect to remain weak for months as builders try to price unsold homes against bargain-bin foreclosures.
There were 297,000 new homes for sale at the end of April, down 4.2% from tje 310,000 in March. At the current pace it would take more than 10 months to get shed all the new homes on the market.
Other data released this week also points to a lackluster recovery for the housing market. The National Association of Realtors reported on Wednesday that while existing home sales grew 2% in April, home prices continued to fall and unsold home inventory grew.