Dennis Norman
This morning the U.S. Department of Commerce released a report showing the sale of New Homes in July were at a seasonally adjusted annual rate of 433,000, a 9.6 percent increase from June and makes the fourth consecutive month of new home sales increases.
The Northeast region saw the biggest monthly increase in new home sales in July with a 32.4 percent increase from June. Next was the South with a 16.2 percent increase and the West with a skinny 1.0 percent increase. The Midwest saw new home sales in July drop 7.6 percent from the month before.
New home sales for July 2009 lag 13.4 percent behind July 2008 new home sales but the year-over-year decline has been improving over the past couple of months. May 2009 showed a decline of 33 percent from a year ago and June improved to a decline of 21.3 percent from the year before. Clearly the gap between 2008 and 2009 new home sales is narrowing.
The Northeast was the only region that saw an increase in year over year home sales with an increase of 9.8 percent in July 2009 over July 2008. The South had a decline of 18.4 percent from a year before, the West a 14.6 percent decline and the Midwest a decline of 4.7 percent from the year prior.
Last month I commented that perhaps the best news in the June report was that the inventory of new homes had declined to 281,000 which represented an 8.8 month supply. For July the news got even better with the new home inventory dropping to 271,000 which represents a 7.5 month supply. An optimum supply would be more in the four to six month range but a 7.5 month supply is the best we have seen in a long time and is headed the right direction.
The median new home sales price for July was $210,100; pretty well the same as Junes adjusted median new home sales price of $210,400. Lower priced new homes continue to dominate in sales. Over 28 percent of the new homes sold in July were in the $150,000 – $199,999 price range and almost 50% of the new homes sales were at prices below $200,000. Only 12.8 percent of the homes sold in July were $400,000 or above.
New home sales are increasing but it appears it is taking quite a while to make the sales happen; the median time on the market for the new homes sold in July was 12.4 months. For June the median time on market for new homes sold was 11.8 months and a year ago it was 8.5 months. In 2007 the median time on the market for new homes sold was 6.2 months; half the time it took for the new homes in July to sell.
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