Noting that the fundamentals for housing demand remain highly positive, NAHB Chief Economist David Seiders attributed the brisk sales pace of recent months to expectations of rising interest rates later in the year. Mortgage interest rates actually fell below their May-June levels in July, he said. "While home buying may fade later this year, it now appears that home sales for 2004 will easily surpass the record set last year.”
Sales in June declined 14.2% in the Northeast, 13.1% in the West and 2.9% in the Midwest and increased 9.6% in the South. But in all four regions sales activity on average increased in the second quarter over the first quarter of this year.
The 374,000-unit inventory of new homes for sale in June represented a 3.4-month supply at that month’s sales pace. “The inventory situation improved during May and June as sales surged, and the supply-demand balance in the new-home market was very, very healthy at mid-year,” Seiders said. “That bodes well for both housing production and home prices in the months ahead.”
Mark Your Calendar for NAHB's Fall Construction Forecast Conference
Get the latest forecasts on housing starts, project budgets and other economic bellwethers of the housing industry at NAHB's Fall Construction Forecast Conference at the National Housing Center in Washington, D.C. on Oct. 27. Click here for more information.
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