New Home Sales Slip in June as Demand Slackens
Sales of new single-family homes slipped 6.6% in June to a seasonally adjusted annual rate of 834,000 units as home buyer demand continued to weaken, according to figures released by the U.S. Commerce Department on July 26. The June sales pace was 22.3% below a year earlier, and down 40% from the housing market’s peak in mid-2005.
"The ongoing contraction in home sales is consistent with NAHB's surveys of single-family builders,” said NAHB President Brian Catalde. “Our Housing Market Index now is down to the lowest level since January 2001, when the national economy was in recession."
"A significant increase in prime mortgage interest rates, along with the tightening of mortgage standards in subprime and other components of housing finance, clearly weighed on home buying in June," said NAHB Chief Economist David Seiders. "Home builders continue to trim prices and offer large nonprice sales incentives, but many prospective home buyers obviously are reluctant to sign on the bottom line."
"We still expect to see signs of stabilization later this year, although downside risks appear to be mounting," said Seiders.
The inventory of new homes for sale in June was 537,000, about the same as May inventory figures, although the equivalent months' supply at the June sales pace edged up to 7.8 months from 7.4 months in May.
Completed homes for sale constituted 33% of the inventory, units still under construction represented almost 51% and units for-sale that were permitted but not yet started represented 16% — no change from the prior month. Completed homes were on the market a median 6.0 months in June, up from 5.7 months in May.
Regionally, new-home sales in June were up 7.6% in the South and down 17.1% in the Midwest, 22.5% in the West and 27.1% in the Northeast.
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NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market
With the current cooling of the nation’s housing market expected to persist into next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.