New-Home Sales Flat in May, Decline in the South
Sales of newly built, single-family homes in May held virtually even with the previous month, declining less than one percentage point to a seasonally adjusted annual rate of 342,000 units, according to data released by the U.S. Commerce Department on June 24.
“In the midst of the prime home buying season, builders report that a number of factors are limiting new-home sales. These include consumer concerns about job security, potential buyers’ inability to sell their existing homes and problems with appraisals coming in too low,” said NAHB Chairman Joe Robson. “The latter issue is directly related to the use of distressed properties (foreclosures and short sales) as comps, which disproportionately impacts the assessed values of nearby homes.”
“Today’s report provides further evidence that the recovery is going to be a slow one as the housing market continues to bump along, trying to find a bottom,” added NAHB Chief Economist David Crowe. “The good news is that, even as the sales pace leveled in May, inventories of unsold new homes continued to shrink for a 25th consecutive month — a trend that is helping bring supply and demand into better alignment and thereby setting the stage for an eventual market recovery.”
New-home sales declined 0.6% to a seasonally adjusted annual pace of 342,000 units in May. Meanwhile, the number of new homes for sale fell 2.3% to 292,000, which is a 10.2-month supply at the current sales pace.
Regionally, the decline in new-home sales occurred entirely in the South, where sales fell 8.5% for the month. Sales were up 1.3% in the West, 28.6% in the Northeast and 18.6% in the Midwest.
Tax Credit Web Site Looks at Opportunity of a Lifetime
Builders and other industry professionals can help spur home sales by referring prospective first-time home buyers to www.federalhousingtaxcredit.com. The NAHB Web site provides detailed information on the $8,000 federal tax credit for first-time home buyers included in the economic stimulus legislation signed into law by President Obama.
Consumers can use the Web site to find information on the tax credit — including a detailed question and answer section. It also includes information about other housing-related and small business measures in the legislation and a number of home-buying resources for consumers.
Spanish Version Also Available Online
A Spanish version of this increasingly popular Web site is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.
Industry professionals are encouraged to highlight either tax credit Web site when marketing to their potential first-time home buyer market.
Want to Know the Housing Starts Through 2017?
Find out in HousingEconomics.com's Long-Term Forecast.
Subscribe and get downloadable Excel tables that feature the housing starts forecast, gross domestic product (GDP), demographics and more.
To learn more, visit www.housingeconomics.com.