New home sales down and up
New home sales remain relatively unchanged from June to July with only a 0.7 percent dip in sales according to the U.S. Commerce Department. From July 2010 to July 2011, new home sales have risen 6.8 percent, so it isn’t all bad news that July didn’t yield any surprise jump in sales.
The National Association of Home Builders (NAHB) reported just one week ago that housing starts dipped in July and days ago, the National Association of Realtors (NAR) reported a bigger decline in existing home sales than had been expected, due in large part to cancelled contracts that had difficulty getting to the closing table.
NAHB notes consumer fears
Regarding new home sales remaining unchanged, NAHB Chairman Bob Nielsen said, “The fact that new-home sales fell by less than one percent in July is an indication of how little conditions have changed in the housing market. While new-home inventories are exceptionally thin, home builders are still competing with large numbers of foreclosed and distressed homes on the market and a climate of uncertainty in which consumers are reluctant to go forward with a major purchase for fear of what economic news tomorrow might bring.”
Northeast region doubled sales volume in July
The median sales price for a new home dropped 6.3 percent last month to $222,000 but was up 4.7 percent from July 2010. Regionally, new home sales dipped 7.4 percent in the South and 5.9 percent in the West. While sales rose 2.4 percent in the Midwest, they actually doubled (increased 100 percent) in the Northeast from their record setting lows of June.
Inventory levels at record low
The pace of sales of new homes is in line with what NABH had forecast, said NAHB Chief Economist David Crowe. “While we expect to see some marginal gains in sales activity through the rest of 2011, we do not foresee any major advances until economic growth helps boost home buyers’ confidence.”
The sales pace left the inventory levels at their lowest level in 48 years at only 165,000 units, a 6.6 month supply at the current sales pace. Crowe said, “The current nationwide inventory of completed new homes ready for occupancy – at 61,000 units – is in keeping with what a single major metropolitan area such as Atlanta might sell in a typical year.”