By Gregg Stratton, Research Economist
New Home Sales JUMP in June
- New home sales in June increased by 11% from May to 384,000 on a seasonally adjusted/annualized basis. However, sales are still 21% below the June 2008 level of 488,000.
- The 384,000 sales in June exceeded the consensus forecast among economists of 350,000.
- The Midwest exhibited the largest increase in sales from May of 43% or 22,000 units.
- The months supply of new homes declined from 10.2 in May to 8.8 in June nationally.
- Approximately half of the new home sales in June were priced below $200,000. In May, 40% of new home sales were priced below $200,000.
What does today’s data mean for consumers?
- The latest increases in both existing and new sales have primarily taken place in the lower end of the market – sub $200,000 – as this segment has responded more quickly to higher inventories and foreclosures through more substantive price declines than other segments.
- Sales for new and existing homes have each increased for three consecutive months through June.
- This appears to be the beginning of the recovery for the housing market, although it is conditional on continued improvement in the credit markets and consumer confidence, and assumes that the intended efficacy of the federal stimulus will materialize in the coming months.
- NAR, for its part, is forecasting existing home sales in the second half of 2009 to be 10-20% higher than the second half of 2008.
Daily Forecast Update
- NAR monthly official forecast as of July 1
- GDP Q2: -1.0%
- GDP Q3: +0.2%
- GDP Q4: +1.0%
- Unemployment rate by the end of 2009: 10.5%
- Average 30-year fixed mortgage rate by the end of 2009: 5.4%
Copyright National Association of REALTORS®, Reprinted with permission