New Home Sales Surge 11% In June, Still Down 50% From 2007

By
Real Estate Broker/Owner

The Commerce Department announced on Monday that new home sales jumped 11% in June from May to a 384,000 seasonally adjusted annual rate.  Compared to June of 2008, new home sales are still down -21.3%.  When compared to 2007, new home sales are down nearly 50%.  I want to bring the current numbers into context because it does reveal just how far the industry has fallen and how affected builders and municipalities have been by this downturn

The inventory of new homes for sale shrunk by -4.1% from last month to 281,000.  The inventory of new homes for sale is down -35.6% from last year.

And finally, the month's supply of housing fell -13.7% from last month and -17.8% from last year to a 8.8 month supply of housing.

The median sales price for new homes still fell from $234,300 in June of 2008 to $206,200 in June of 2009.

These are all positive indicators for the new home market.  The benefit is that jobs are being created, materials are being purchased, and the new property tax revenue should help municipalities that are struggling to meet their budget.

The "problem" is that the new home market is not the existing home market.  In other words, the bigger problem facing the real estate market, the banking system, and the broader economy is not just new home sales, but falling home prices for homeowners.  And based on the latest data from the NAR, home prices are still falling based on the ongoing supply and demand imbalance. 

 

 

 

Comments (4)

Matt Grohe
RE/MAX Concepts - Des Moines, IA
Serving the metro since 2003

Mark: The home sales surge is a lot more exciting for me than the troop surge ever was. Good bless those troops though, both home and abroad. Thanks

Jul 28, 2009 03:36 PM
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

Looks like there is some good news here. I hope it continues.

Jul 28, 2009 03:39 PM
Liz Schomers
Pleasant Ridge, MI

Hopefully the real estate bubble is finally bottoming.  Home prices have become affordable again, lenders are using better lending guidelines, housing inventories are coming down and this all seems to be good news.

Jul 28, 2009 03:58 PM
Jim Crawford
Maximum One Executive REALTORS® - Atlanta, GA
Jim Crawford Atlanta Best Listing Agents & REALTOR

This is basically what I am seeing in Atlanta.  We are not out of the woods just yet.

Jul 29, 2009 01:43 AM