Wednesday, May 26, 2010

New Home Prices: Median Lowest since 2003

by Bill McBride on 5/26/2010 12:40:00 PM

As part of the new home sales report, the Census Bureau reported that the median price for new homes fell to the lowest level since 2003.

New Home Prices Click on graph for larger image in new window.

This graph shows the median and average new home price. It appears the builders sold at a lower price point in April, and that helped boost sales.

This makes sense since many of the buyers were trying to take advantage of the housing tax credit (and probably using FHA insurance). Since the modification programs and the delays in foreclosure limited the number of distressed sales - many buyers at the low end found buying a new home easier than buying an existing home.

New Home Sales by Price The second graph shows the percent of new home sales by price.

Half of all home sales were under $200K in April - tying Jan 2009 as the highest level since 2003 (there was panic selling in Jan 2009).

And excluding Jan 2009, this is the highest percentage under $300K since May 2003 - and the highest under 400K since April 2003.

To summarize: the homebuilders sold 16,000 more units in April 2010 than in April 2009 - probably because of the tax credit, and at lower prices - and now sales will decline sharply in May probably close to the 34,000 units sold in May 2009.