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New Home Sales Cool in July, But Remain Above Last Year’s Record Pace

“Builders across the country are still very upbeat about the single-family housing market,” said NAHB President Bobby Rayburn. He noted that last month’s NAHB-Wells Fargo Housing Market Index, which is based on the association’s monthly surveys of single-family home builders, was the highest it has been this year and “indicated that all the fundamentals are in place for strong months ahead.”

“Sales activity raced ahead after mortgage rates hit bottom in March and large numbers of fence sitters jumped into the market to beat widely anticipated mortgage rate increases,” said NAHB Chief Economist David Seiders. “We knew some payback for that additional demand was in the cards.”

“Market fundamentals still are in place for single-family housing,” Seiders said. “The demographic foundations are solid, overall economic conditions have improved, house values continue to rise and mortgage rates have receded following the second-quarter bounce. We are certainly on track for another home sales record in 2004.”

The inventory of unsold new homes rose by 4.2% to 393,000 units in July, a 4.3-month supply, but the median amount of time that a completed unit was on the market fell to a record low of 3.7 months.

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