US new homes sales fell in February. Bloomberg reports:
New-home sales in the U.S. unexpectedly fell in February to the lowest level in almost seven years, dimming prospects for a quick revival in housing.
The supply of unsold homes climbed to the highest in 16 years, the Commerce Department said today in Washington. Purchases dropped 3.9 percent to an annual pace of 848,000 last month. Economists had forecast they would rise to a 985,000 rate, based on the median forecast in a Bloomberg News survey...
The median price of a new home fell 0.3 percent in February to $250,000 from $250,800 a year earlier, today's report showed.
The number of homes for sale at the end of the month rose to 546,000 from 538,000 in January. That left the supply of homes at the current sales rate at 8.1 months' worth, compared with 7.3 months in January. The number of homes completed and awaiting a buyer rose to 179,000 last month.
In the UK, however, house prices continue to rise in March. Reuters reports:
Housing researchers Hometrack said average prices rose 6.7 percent in March on a year ago, accelerating from a 6.4 percent increase in February to its fastest pace since June 2003. Prices rose 0.8 percent on the month, although the figures are not adjusted to factor in seasonal conditions in the market.
Rapid house price inflation in London and the south east of England continue to distort the overall national picture, Hometrack said, while three interest rate hikes since August seem to be squeezing affordability in other regions.
No doubt, the BoJ must be watching all these developments. From AFP/CNA:
Bank of Japan governor Toshihiko Fukui warned Monday that very low interest rates could store up trouble for the economy in the future if people get over reliant on cheap credit.
"We need to gradually adjust the level of interest rates to reflect changes in the economy and prices," Fukui said in parliament.
"Even if the economy expands at a moderate rate, there are concerns that we may see various adverse effects resulting from the market's belief that the extremely easy interest rates will last for a long time," he said.
The focus on the longer term was also evident in the minutes of the February meeting released yesterday. Bloomberg reports:
Most Bank of Japan board members said the central bank needed to explain that it raised interest rates in February based on the outlook for the economy and prices over one to two years, meeting minutes show.
"The bank had made the decision from a longer-term perspective," taking into account the possibility that consumer prices may fall in the short term, most members said, according to minutes of the Feb. 20-21 meeting released today in Tokyo.