US new home sales in 2010 mark record low

Sales of newly built homes in the US hit their lowest level in 2010 since records began 47 years ago.

For the year there were only 321,000 sales across the US, down 14% from 2009 and the fifth year of decline, the Department of Commerce said.

Sales did mark a strong rise in December, rising 17% from the previous month on a seasonally adjusted basis.

However, separate data showed mortgage applications fell sharply in January as borrowing rates continue to rise.

Applications for mortgages to finance home purchases fell nearly 9% last week, according to the Mortgage Bankers Association, hitting their lowest level since October.

The drop comes in response to a steady rise in long-term borrowing costs in the US in recent weeks, hitting 4.8% on 30-year mortgages in the last week.

‘Distressed’ sales

Despite the rise in the last month of the year, 2010 still recorded the lowest volume of sales in a December since 1966, according to thecommerce department’s data.

The year had begun well, with activity boosted by a homebuyers’ tax credit.

But sales levels plummeted in the summer following the April expiry of the credit, which economists claim merely encouraged buyers to bring forward purchases they would have made anyway.

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