New single-family home sales took a notable upturn in July, with the month becoming the best month for new sales since 2007, according to HUD and the U.S. Census Bureau. The median sales price of new houses sold in July was $294,600; the average sales price was $355,800. This would be a pullback from an annual sales rate of 592,000 in June, the highest level since February 2008.
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Ian Shepherdson of Pantheon Macroeconomics noted that the monthly housing sales data is very volatile and that a recent slowdown in mortgage applications could signal somewhat weaker demand in the coming months.
These new, never-occupied, homes make up about one-tenth of the overall housing market.
The increase came as somewhat of a surprise: Before the report was released, economists polled by Reuters had anticipated that new home sales would fall to rate of 580,000 in July. Based on the current sales pace, home supply at the end of July stood at about 4.3 months, lower than the 4.9 months reported a month earlier. “The margin of error is wide and often includes zero, which means we can’t be certain whether these month-over-month or year-over-year changes actually increased, decreased, or stayed flat”.
But the pace remains well below the peak level of 1.39 million in July 2005. Prior to the recession, the last full year below that mark was 1991. On Tuesday, Aug. 23, 2016, the Commerce Department reports on sales of new homes in July.
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Year-over-year, three out of four regions made a significant leap, with sales jumping 39.6% in the South, 35.5% in the Midwest, and 25% in the Northeast, respectively.
