New home sales measure the number of newly constructed homes with a committed sale during the month. The level of new home sales indicates housing market trends and, in turn, economic momentum and consumer purchases of furniture and appliances. Why Investors Care
| Released on 7/26/07 For Jun 2007 | ||||||||||||
| ||||||||||||
Highlights
June's home sales will shake up the outlook for the housing sector. Yesterday's existing home sales data showed accelerating declines as do today's data on the new home side. New homes sold at an annual rate of only 834,000, well below expectations. May and April were revised lower by a net 39,000. Housing is swollen with supply, at 7.8 months for new homes and 8.8 months for existing homes. This spells yet greater troubles for home builders.
But prices are holding in there as builders on the new home side and homeowners on the existing side stick to their asking prices. The median price for a new home did fall 1.3 percent in the month to $237,900 but is only down 2.2 percent year-on-year. Yesterday's existing home sales data showed a median price of $230,100, up 3.3 percent on the month and up 0.3 percent on the year.
Firm asking prices along with more stringent lending standards and less favorable interest rates are squeezing the housing sector badly. Treasuries firmed and the dollar eased in reaction to the data.
New home sales reversed course in May with a 1.6 percent dip in sales, following a 12.5 percent the previous month. May's sales pace of 915,000 units annualized is 15.8 percent on a year-on-year basis. New home sales are more volatile than existing home sales. As with existing homes, supply remains a problem. New homes supply on the market rose 7.1 months from 7.0 months in April -- not a favorable sign. Expect higher mortgage rates and tightened lending standards to keep sales soft in June.
New home sales Consensus Forecast for June 07: .890 million-unit rate
Range: .875 million to .925 million-unit rate
![[Chart]](chart.gif)
|
There is no question that lower interest rates boost home sales. Other factors also impact housing decisisions, such as employment and income growth, and wealth stemming from stock market gains. |
| 2007 Release Schedule | ||||||||||||||||||||||||||
|
powered by
![[Econoday]](../../../../../../../../../images/logo.gif){kind=logo}