New home sales increased 23.6% to a seasonally adjusted annual rate of 330,000 last month, up from an downwardly revised 267,000 in May, the Commerce Department reported Monday. Sales year-over-year fell 16.7%.On the good news front, prices dropped 1.4%, which improves affordability, but inventories shrank again to the lowest levels in 42 years. That shows serious weakness in real estate and that builders are not confident in growth anytime soon. Even with the inventory problems and more affordable prices, sales aren't rebounding in sufficient numbers. People are simply sitting on the sidelines either out of choice, can't get financing, or can't move because they're underwater on their existing properties. Despite record and near record low interest rates, people aren't moving to buy homes and the real estate markets are sputtering along.
The June sales pace is the second slowest ever on record since the Commerce Department began tracking the data in 1963.
But it was slightly better than the annual rate of 310,000 economists were expecting, according to a consensus survey by Briefing.com.
Monday, July 26, 2010
Spinning New Home Sales Report - Yet Another Mixed Bag
Once again, we have a report that is a mixed bag on the real estate front. The headline blares: "New home sales rebound 24%", but the moment you read the article, you see that sales are still down from last year, and the 24% gain from May was due in large part to the downward revision of the already abysmal May figures.