COMMERCE DEPT.: New Home Sales Fall to Record Low in July
By David M. Kinchen
Huntingtonnews.net Real Estate Writer
Sales of new single-family homes fell 12.4 percent to a seasonally adjusted annual rate of 276,000 units in July, according to data released by the U.S. Commerce Department on Wednesday, Aug. 25. This was the lowest sales rate for new homes on record.
"Today's report, though not unexpected, is disappointing in view of the improvement in sales activity that we saw in June," said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. "Potential home buyers have become very hesitant due to uncertainty about the economy and job market, and are putting off the decision to buy until they feel more confident."
"The slow pace of economic recovery and worries about job security are weighing heavily on the minds of potential home buyers right now," agreed NAHB Chief Economist David Crowe. "As a result, the housing market is clearly in a holding pattern. That said, NAHB does not project that a double-dip recession is in the cards, and we are looking for employment gains later this year to help bolster sales activity moving forward."
Sales of new homes fell across every region in July, with a 13.9 percent decline registered in the Northeast, an 8.3 percent decline in the Midwest, an 8.7 percent decline in the South and a 25.4 percent decline in the West.
Meanwhile, the latest figures indicated that builders are keeping a tight rein on the inventory of new homes for sale. That inventory remained unchanged at 210,000 units in July. However, due to the slower pace of sales activity, the month's supply of homes rose to 9.1 from 8.0 in the previous month.
The dismal news on the new home construction front comes a day after the National Association of Realtors (NAR) released its report showing that existing home sales, which account for about 90 percent of housing transactions, dropped 27.2 percent to a seasonally adjusted annual rate of 3.83 million units in July from a downwardly revised 5.26 million in June, and are 25.5 percent below the 5.14 million-unit level in July 2009.
The NAR report noted that sales are at the lowest level since the total existing-home sales series launched in 1999, and single family sales – accounting for the bulk of transactions – are at the lowest level since May of 1995.