Big drop in new home sales in August
Breaking, from MarketWatch:
U.S. (new) home sales fell 11.5% to a 17-year low in August, the Commerce Department estimated Thursday. The decline in new-home sales to a seasonally adjusted annual rate of 460,000 was much weaker than the 505,000 pace expected by economists surveyed by MarketWatch.
Economists are wondering how far the housing market can fall. There are few signs of a bottom in the data. New-home sales are down 34.5% compared with a year ago. The months' supply of homes on the market rose to 10.9 months from 10.3 months in July. Median sales prices have fallen 6.2% in the past year to $221,900.
It was a much bigger sales decline than the small 1% drop that economists had been expecting. The average price of a new home sold in August dropped by a record amount of 11.8% to $263,900, compared with the July average of $299,100. The median price was also down, falling 5.5% to $221,900.
Instant analysis from Diana Olick on CNBC: "This is not good data for the homebuilders."
-- Peter Viles
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This seems like this would be a truer picture of the housing market than we get from the resale figures, in which so much of the data is subject to manipulation.
When they talk about inventory levels vis-a-vis resale homes, I just have to roll my eyes. No one has any idea how many near-distressed sellers are waiting in he wings for the "better market."
Posted by: Giacomo | September 25, 2008 at 10:04 AM
Obviously no one is buying, but another reason for the decline in new home sales is no one is building either, so it is not necessarily a true comparison to the prior year. Glad I am not a homebuilder though. I would not buy a new or resale for at least another 24 months.
Posted by: Eastsiiiide | September 25, 2008 at 11:36 AM
The lowest level of new home sales in 17 years? That would be 1991, or the next to last year of the most recent Republican administration, coincidentally, also a Bush administration. Is there a trend here? Is the son trying to outdo his old man?
Posted by: Ken | September 25, 2008 at 11:47 AM
New homes sales are going to be way worse than the market as a whole. Home re-sales are a more important figure. Whether there is a market for existing homes will be the lead indicator for a credit market rebound. If banks won't lend on existing homes at any price, we are in for a much worse ride than we deserve, and the bottom will fall out. New home starts and sales are a good indicator for employment and other general economic statistics, but employment is a minor concern right now. If credit doesn't free up, there will be no underwriting of future construction projects and therefore no construction jobs.
Posted by: dpj1 | September 25, 2008 at 12:51 PM
I've been sleeping in my van for the past 2 years and it's actually pretty comfy. The kids get cranky sometimes, and the cats escape, but overall we're happy.
We sleep on vacant construction lots next to behemoth unfinished framed homes. I hope the situation stays the same so we can keep our squatted land.
Posted by: Landon Bales | September 25, 2008 at 04:03 PM
Be wary viewing situations from the framework the republicans build and offer. They tend to frame only around their warped perceptions of worth, meaning and ethos. There's a larger picture here.
my video of Obama's vision:
http://www.youtube.com/watch?v=dVwpMB8QAUU
and one of McCain's Bomb Iran Song:
http://www.youtube.com/watch?v=SLv4mtwsRos
HomeComing Queen Palin's got a GUN! can't be missed...
http://www.youtube.com/watch?v=59mOukUZNUo
Posted by: Stephen | September 25, 2008 at 05:51 PM