New Home Sales on Pace for Worst Year on Record

August 23, 2011 (Chris Moore)

Sales of new single-family homes declined for the third consecutive month in July putting 2011 on a pace to be one of the worst years since the Census Bureau started keeping records back in 1963.

Sales of new homes declined 0.7 percent from June to July at a seasonally adjusted rate of 298,000, down from a revised rate of 300,000 in June. Sales in June were revised downward from 312,000 to 300,000.

New single-family home sales had fallen to an all-time low of 279,000 in February and were followed by gains in March and April, but have been declining since May.

Sales in July were still 6.8 percent higher than the estimated 297,000 units sold in July of 2010.

Last year was the worse year on record for new single-family home sales, but so far sales for new homes for the first seven months of this year compared to the same period last year are 11 percent lower. If current sales trends continue, 2011 will likely replace 2010 as the worse year on record.

Year-to-date, sales are 29.4 percent lower in the Northeast, 17.6 percent lower in the Midwest, 7.3 percent lower in the South, and 6.9 percent lower in the West.

The median sales price of the new homes sold in July was $222,000, which was down from $236,800 in June. The average sales price for a new home in July was 272,300, up slightly from $272,000 in June. Three of every four new single-family homes sold in July was under $300,000.

Two of the four regions experienced a gain in monthly new home sales from June to July with sales in the Northeast double what they were the month before while the Midwest posted a gain of 2.4 percent. The South and the West posted declines of 7.4 percent and 5.9 percent, respectively.

Compared to a year ago, new single-family home sales in the South and the Midwest remained unchanged while the West posted a sales increase of 45.5 percent and sales in the Northeast declined 3.4 percent.

Inventory of new single-family homes remained relatively balanced by historic standards with a seasonally adjusted 165,000 homes available for sale, which translates into a 6.6 months supply of inventory.

Tags: Census Bureau, new home sales, single-family homes, median sales price, average sales price

Source:
Census Bureau