NEW HOME SALES DECLINE 30 PERCENT IN 2007

February 23, 2008

The pace of new-home sales across California fell more than 30 percent in 2007 compared with 2006, according to recent data from the California Building Industry Association (CBIA). Its January report showed sales of single family homes dropped by 29.7 percent, with new home and condominium sales during 2007 totaling 61,861 compared with 89,773 the previous year.

"The 30 percent decline in sales for 2007 is likely the largest annual decrease we will see during this downturn," said Jonathan Dienhart, director of published research for HWMI. Dienhart suggested that federal reaction to the housing slowdown, including consecutive rounds of interest rate cuts, could help minimize declines going forward. "With housing assistance legislation being passed by the federal government, which includes temporary increases in conforming loan limits, along with aggressive rate cuts by the Federal Reserve, hopefully any further declines in 2008 will be minimized with consumers gaining better access to credit and homes becoming more affordable due to lower prices and mortgage rates."

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