New Home Sales Fall

Data from the U.S. Census Bureau reveals that month-over-month new-home
sales fell sharply in July from the previous month, which is in contrast to the
increase in sales for existing-homes.

The Census Bureau data shows that new single-family home sales for July
dropped 13.4% month-over-month to a seasonally adjusted annual rate of
394,000, this compares to a downwardly revised June sales figure of 455,000.
However, year-over-year new-home sales have risen nearly 7 percent when
compared to July of 2012. The projected annual pace remains well below the
700,000 sales rate that is consistent with a healthy market.

These sales figures are also far below the peak rate set in 2005 when new-home
sales posted a seasonally adjusted annual rate of nearly 1.4 million. At the end
of July, the number of new homes for sale totaled 171,000, a supply of 5.2
months, up from a supply of 3.9 months at the end of June.

By contrast overall existing-home sales for all types of homes increased by 6.5
percent in July to 5.39 million units; this was up from June’s sales of 5.06 million
units. July’s existing-home sales figures were up 17.2 percent from 4.60 million
units in July of 2012. Existing-home sales have remained above year-ago levels
for 25 straight months, this according to the National Association of Realtors®.
All numbers are based on a seasonally adjusted annual rate.

Further data from the Census Bureau reveals that the median sales price for new
homes sold in July was $257,200; this was a slight 3% rise above the June

Associated Press Economics Writer, Christopher Rugaber, says, “The impact of
higher mortgage rates has surfaced in the new-home market faster because the
July sales report reflects signed contracts. Sales of previously occupied homes
reached a nearly four-year high last month. But that report measured completed
sales, which typically reflects mortgage rates locked in a month or two earlier.”
“The jump in previously occupied home sales likely reflected a rush by home
buyers to lock in lower rates. Some economists expect those sales to fall back in