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Coming off a historic low in May, sales of newly built, single-family homes rose 23.6% to a seasonally adjusted annual rate of 330,000 units in June, according to U.S. Commerce Department data released on July 26.
“The June numbers are an encouraging sign that new-home sales are coming back from an expected slow period that followed the expiration of the home buyer tax credit program,” said NAHB Chairman Bob Jones. “While we still have quite a ways to go on the path to recovery, it’s good to see that we are headed in the right direction.”
“It’s worth noting that some of the new-home sales in June were due to move-up buyers who were able to sell their previous home to a tax-credit-eligible buyer while that program was active,” said NAHB Chief Economist David Crowe.
“Also, while sales activity is still far from robust, it has picked up some momentum as positive factors such as historic low mortgage rates, great selection and attractive prices help draw potential home buyers back to the market,” Crowe said. “We anticipate that this momentum will continue along with a gradually improving economy, although other factors such as a critical lack of production financing remain a drag on housing’s recovery.”
Sales of new homes rose strongly in three out of four regions in June. Sales gained 46.4% in the Northeast, followed by increases of 33.1% in the South and 20.5% in the Midwest. New-home sales in the West dropped 6.6% to hit a new record low.
Meanwhile, the nationwide inventory of new homes for sale declined to 210,000 in June, the thinnest it has been since September of 1968. This amounts to a 7.6 months’ supply at the current sales pace.