New home sales drop 4.4% in February
WASHINGTON (AP) — U.S. new home sales fell 4.4% in February with bigger declines expected in coming months as the coronavirus puts a major crimp on home sales.
The Commerce Department said Tuesday that February sales dropped to a seasonally adjusted annual rate of 765,000 homes, down from a rate of 800,000 homes in January.
The January figure was revised up from an initial estimate of 764,000 but economists are warning that home sales, along with many other parts of the economy, are expected to take a big hit in coming months due to the shutdowns that have occurred to try to limit the spread of the coronavirus.
The report showed that the median price for a home sold in February was $345,900, up 6.3% from a median price of $325,900 in January.
Economists are forecasting big declines for the overall economy with a wave of layoffs already starting due to the big hit the economy has taken in the wake of the virus.
Larry Kudlow, head of the president’s National Economic Council, told reporters at the White House Tuesday that overall economic growth was “going to be rough” in coming months but he said that the support that the economic stimulus package that Congress is working on means “we’ll be setting the stage for a good rebound in the second half of the year.”
Chris Rupkey, chief financial economist at MUFG in New York, said, “New home sales will likely plummet in the next few months not because of a recession per se, but the reality is the public has been told to stay in their homes.”
By region of the country, home sales in February surged 38.9 percent in the Northeast, a huge gain that was attributed to warmer than usual weather. Sales were up 1% in the South and fell by 17.2 percent in the West and were down 7.3% in the Midwest.
AP White House reporter Darlene Superville contributed to this report.