New Home Sales Weakest in Seven Years

New home sales fell to a seasonally adjusted annual rate of 848,000 units in February, the weakest reading in seven years, according to newly released government figures.Further casting a pall on the spring home buying season, there is now an 8.1 month supply of new homes on the market, a 26% spike from the same month last year. New home sales fell 3.9% compared to the previous month, but declined 18.3% compared to February of last year. The largest sequential decline came in the Northeast and West, which fell 26.8% and 24.6%, respectively. "Based on all of the proxies we look at and the anecdotal information from industry contacts, we believe that the recent weakness is mostly weather, but there will be no definitive answer to this question for at least a month," writes RBS Greenwich Capital analyst Stephen Stanley. "In the meantime, it is a safe bet that many tubs of ink will be spilled debating this point." The Census Bureau and the Department of Housing and Urban Development compile the new home sales figures.