Aug
23

New-House Market Struggles Most

August 23, 2011

The amount of new homes sold around the country last month remained pretty much unchanged from the month prior.

The sale of newly built, single-family homes in July fell 0.7 percent to a seasonally adjusted annual rate of 298,000 units, according to the U.S. Commerce Department.

Technically, the dip marks the third straight month of declines. Economists had expected sales to increase 1 percent.

On the bright side, the sales mark a 6.8 percent increase from the July 2010 estimate of 279,000.

a bunch of abandoned new homes“The sales pace of newly built, single-family homes in July was in line with what it has been over the last year, and this is in keeping with our forecast,” said National Association of Home Builders (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.”

Other new-home statistics for July:

*The Midwest posted a 2.4 percent increase in sales

*The South posted a 7.4 percent decline and the West saw a 5.9 percent drop.

*The Northeast recovered from a record low number in June and actually had a 100 percent increase in sales.

*The median sales price of new homes sold in July was $222,000, and the average sales price was $272,300.

*The inventory of new homes for sale fell to a 48-year record low of 165,000 units, which represents a 6.6-month supply.

“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,” said Bob Nielsen, NAHB chairman.

“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.”

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