New-Home Sales Match Two-Year High

August 23, 2012

The housing industry is trying desperately to recover, and we have recent data to prove that, even in the Chicago real estate market:

sold sign*The sale of existing U.S. homes in July was 10.4 percent higher than the pace in July 2011.

*Existing-home sales in Illinois last month increased 25.5 percent over the previous year’s levels for the best July performance since 2007.

*In the nine-county Chicagoland area, existing-home sales in July were up 29.1 percent from July 2011.

*In the city of Chicago, July 2012 existing-home sales were up 26.2 percent compared to the previous July.

Great national and local numbers on sales of existing homes, but for an industry to really thrive, it needs new growth as well. Well, we have positive news there too.

New data released Thursday from the Commerce Department shows that sales of new U.S. homes last month rose 3.6 percent to reach a seasonally adjusted annual rate of 372,000 units. That’s the same pace set three months ago, when sales reached the highest point since April 2010.

“Sales of new homes in July returned to the same solid pace they set in May, which was the fastest sales rate we’d seen in more than two years,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB).

“This is further evidence that consumers are becoming more confident in local housing markets as they look to take advantage of today’s very favorable prices and interest rates.”

Amidst our positive data, we have been discussing a new challenge for the real estate industry: amount of available homes out there. The inventory of new homes for sale hit a new record low in July.

“The fact that the inventory of new homes for sale reached an all-time low in July is a worrisome signal that ongoing, unnecessarily tight credit conditions are keeping builders from being able to replenish supplies as consumer demand improves,” said NAHB Chief Economist David Crowe.

No one said recovery would be easy, but at least we seem to be moving in the right direction.

“Today’s good report is the latest indicator of a gradual, upward trend that we expect to continue through the remainder of this year,” said Crowe.

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