Jim Rogers says U.S. Should Abolish the Federal Reserve Bank on CNBC, 3/12/08

New home sales have tumbled 29.8 percent in the past 12 months, inventory is highest since the 1980’s.

The following is an excerpt from http://afp.google.com/article/ALeqM5jOHEUanF4jOnzmVuKbYJJ1l4XBQQ, published on 3/26/08:

“New home sales have tumbled a dramatic 29.8 percent in the past 12 months as a multiyear slump continues to deflate the American residential property market despite sustained Federal Reserve interest rate cuts.

The Fed has slashed US rates since September, partly in a bid to revitalize the ailing home market.

Although sales fell, prices increased in February from a month earlier suggesting that recent price declines might be luring new home buyers back into the market.

“There are still too many houses sitting out there but progress is being made. Interestingly, the median price rose in February though it is down almost three percent over the year,” said Joel Naroff, president of Naroff Economic Advisors.

The median price of a new home increased 8.2 percent from a month earlier to 244,100 dollars while the average sales price climbed 4.9 percent for the month to 296,400 dollars.

The ongoing drop in sales continues to pressure builders’ inventories of unsold new homes.

The government survey showed that the new home market has a 9.8 month supply of homes at the current sales clip, meaning it would take that time to clear the unsold volume of new properties languishing on the market.

The glut of homes on the market has swelled to heights not seen since the early 1980s and has risen markedly in the past year as the property slump has worsened.

The US central bank has trimmed its key short term interest rate to 2.25 percent in a bid to shore up home sales and wider economic momentum. Fed policymakers have slashed the federal funds rate from 5.25 percent since September as a credit squeeze has deepened the economic malaise.”