Mortgage Finance Turmoil Hits August New Home Sales
Hit by turmoil in the mortgage finance system, sales of new single-family homes slipped 8.3% in August to a seasonally adjusted annual rate of 795,000 units, 21.2% under the pace of a year earlier, the U.S. Commerce Department reported on Sept. 27.
“As our surveys have been showing, the credit crunch continues to take a heavy toll on consumers and builders alike,” said NAHB President Brian Catalde.
“The August report shows that the supply-demand imbalance in the single-family housing market still is quite serious, and the imbalance clearly is putting downward pressure on home prices,” said NAHB Chief Economist David Seiders. “NAHB’s forecast shows a trough for home sales in the early part of 2008, assuming that the Fed keeps overall employment and income growth going and that order is restored to key parts of the housing finance system.”
“We also expect builders to strengthen price and non-price incentives to bolster sales and limit cancellations,” Seiders said.
The median price of new homes sold in August was $225,700, 7.5% below a year earlier, the Commerce Department reported.
The inventory of new homes for sale edged down 1.5% to 529,000 in August as builders slowed construction and concentrated on selling off their inventory. But the equivalent months’ supply at the slower August sales pace increased to 8.2 months, up from 7.6 months in July.
Completed homes for sale comprised 34% of the inventory, while units still under construction represented almost 50% and permitted but not yet started for-sale units were 16%.
The median length of time that completed homes remained on the market was 5.9 months in August, down slightly from 6.0 months in July.
Regionally, new-home sales in August were up 42.3% in the Northeast and 20.5% in the Midwest. Sales were down by 14.7% in the South and 20.8% in the West. All four regions reported a far slower sales pace than a year earlier.
For more housing statistical information, click here (housingeconomics.com).
Attend the Fall Construction Forecast Conference in October
Plan to attend NAHB's Construction Forecast Conference on Oct. 24 at the National Housing Center in Washington, D.C. The conference brings together the nation's premier housing economists and finance experts for an in-depth examination of the economic outlook for the housing industry.
Can't attend? Watch the conference webcast live.
For more information, or to register for the conference or webcast, visit www.nahb.org/cfc.
Want to Know the Housing Forecast for the Top 100 Metros?
Find out in HousingEconomic.com’s 2007-2008 Metro Forecast (free preview). Get the metro forecast with in-depth analysis, overviews and downloadable Excel tables.
To learn more, visit www.HousingEconomics.com.
Free NAHB Kit Gives Builders Back-to-Basics Tips in Navigate the Slowdown
What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn.
To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here.
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.