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New-Home Sales Rebound From Record Low


Coming off an historic low in May, sales of newly built, single-family homes rose 23.6% to a seasonally adjusted annual rate of 330,000 units in June, according to U.S. Commerce Department data

Coming off an historic low in May, sales of newly built, single-family homes rose 23.6% to a seasonally adjusted annual rate of 330,000 units in June, according to U.S. Commerce Department data.

ìItís worth noting that some of the new-home sales in June were due to move-up buyers who were able to sell their previous home to a tax-credit-eligible buyer while that program was active,î said National Association of Home Builders Chief Economist David Crowe. ìAlso, while sales activity is still far from robust, it has picked up some momentum as positive factors such as historic low mortgage rates, great selection and attractive prices help draw potential home buyers back to the market. We anticipate that this momentum will continue along with a gradually improving economy, although other factors such as a critical lack of production financing remain a drag on housingís recovery.î

Sales of new homes rose strongly in three out of four regions in June. The largest percentage increase was the Northeastís 46.4% gain, followed by a 33.1% gain in the South and a 20.5% gain in the Midwest. The West was the only region where new-home sales did not improve in June, instead falling 6.6% to a new record low.

Meanwhile, the nationwide inventory of new homes for sale declined to 210,000 in June, the thinnest it has been since September 1968. This amounts to a 7.6 monthsí supply at the current sales pace.