Sales of new homes plunged in February, a dismal sign for the housing market.
The numbers for new home sales are in for February and they are not good.
For the third straight month, sales for new homes plunged. Another sign consumers are pulling back in a big way when it comes to the buying into the American dream.
New home sales took a dive in February, falling nearly 17%, the slowest pace on record in nearly 50 years.
Analysts say the snow and cold was a factor that kept buyers away, but the drop also shows how the housing market is still struggling to find solid ground since the recession.
Beth Ann Bovino, S&P senior economist, says "still the number is very bad it is a concern for basically this fragile recovery in housing and certainly puts the risk of basically another turn around in housing for the U.S."
It is the third straight month of declines for new home sales at a time when interest rates are low. And nationwide, the median price of a new home dropped 14% in February, the lowest since 2003. Analysts say if new home sales don't pick up in the Spring, it could begin to have an impact on the overall economy.
Ms. Bovino says "if we see this figure of new home sales if we se this extended into basically the spring season then we're going to see a real hit to the economy. We're going to see basically those construction jobs are going to disappear. We're going to see people not needing to buy that new refrigerator or new appliance and what does that mean for home prices."
In addition to new home sales, a wave of foreclosures is still dragging down the housing market, along with the backlog of inventory of existing homes up for sale.