Looking back on the Commerce Department's report that June's new home sales fell by 8.4% to a seasonally adjusted 350,000 annual rate of homes sold, was not expected. Although many economists were surprised at the sudden drop in sales after promising growth in housing, most are unfazed.

May’s new home sales were just recently revised to show a gain of 15,000 units sold, showcasing a 15.1% increase in new home sales since last June.   Also, areas like Southern California and Chicago have experienced a rise in housing prices, as supply stagnated, which increased the number of bidders per house. 

But most importantly, the Commerce Department reported that the construction of new homes was at its highest point since October 2008 with an increase of 49,000 more housing starts per year.

If we attribute the fall of new home sales to a lack of real estate inventory, then house prices will continue to rise until the supply of new homes satisfies the demand. Until then, the rise in housing prices may restore confidence to buyers and sellers and annual home sales across the U.S. will increase.

 

Michael Hobbs, SRA   PahRoo Appraisal & Consultancy

Twitter @Pahroo

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2 Comments on June Was An Anomaly?

JUL
31
654,708 Points 56 Featured Posts Outside Blog Called Shot Master

Michael...I do not believe it is a shortage of buyers causing the decline. It seems to me we have a shortage of listings.
5:42am • #1
105,804 Points Called Shot Master

Of course housing will not continue to improve if the economy does not show signs of improving any time soon.
5:43am • #2


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Michael Hobbs, SRA

Michael Hobbs, SRA, LEED GA, RAA

Chicago, IL

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PahRoo Appraisal & Consultancy

Address: 1707 W. Roscoe Street, Suite 1, Chicago, IL, 60657

Office Phone: (773) 388-0003

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