Highlights
Report after economic report are showing accelerating contraction as are reports on the housing sector, from yesterday's mortgage bankers' data and existing home sales report to today's new home sales report which shows a very steep 10.2 percent decline to a record low and much lower-than-expected annual unit rate of 309,000 (revisions to prior months were mixed with December revised 13,000 higher to 344,000). Home-price contraction, which has upended the financial system, is continuing uninterrupted. The median price for a new home fell a very steep 9.9 percent in January to $201,100, pulling down the year-on-year rate to -13.5%.

The supply of new homes on the market totals 342,000, down from 353,000 in December but when compared against January's much lower sales rate shows 13.3 months of supply, a record and well up from 12.2 months in December. Falling home prices and lower mortgage rates have yet to reverse housing's long and deepening slide.

Regional details show strength in the Northeast with other regions, especially the West, showing increasing weakness. Markets seem resistant to the rush of bad economic news, including durable goods and jobless claims earlier this morning as well as this report. Prospects that fiscal stimulus and government measures for the banking will correct the economic slide remain dominant, at least for now.

Market Consensus Before Announcement
New home sales continued to spiral downward in December, plunging 14.7 percent in December to a record low 331,000 annual unit rate from a 388,000 annualized pace in November. Supply on the market stood at a record high of 12.9 months vs. 12.5 months in November. And supply continued to weigh on prices as the median price for a new home plunged 6.0 percent from November to $206,500 and was down 9.3 percent from a year ago. While we may get a boost in coming months from newly enacted tax incentives, what is weighing on potential homebuyers now are tighter credit standards and rising unemployment.

New home sales Consensus Forecast for January 09: 330 thousand-unit annual rate
Range: 300 thousand to 350 thousand-unit annual rate

2009 Release Schedule

Released On: 1/29 2/26 3/25 4/24 5/28 6/24 7/27 8/26 9/25 10/28 11/25 12/23 Released For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov