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Economy in Brief

New Home Sales Weaken
by Tom Moeller August 25, 2004

Sales of new one-family homes fell a sharp 6.4% in July to 1.134M, the lowest level since last December. Sales in June were revised down sharply to 1.211M from the initial report of 1.326M. Consensus estimates had been for sales of 1.300M.

Sales fell hard in the Northeast by 23.5% (-19.5% y/y) and in the South by 15.9% (-5.9% y/y). In the West sales slipped 1.7% (-4.0% y/y) for the third decline in the last four months. Sales in the Midwest rose a solid 21.5% (17.1% y/y).

The median price of a new single family home fell 2.6% to $207,400 (9.0% y/y), 5.6% below the February peak of $219,600.

During testimony before the Senate Banking Committee, Fed Chairman Greenspan indicated in response to a question about soaring house prices, "This observation raises the possibility that real estate prices, at least in some markets, could be out of alignment with the fundamentals." The complete Monetary Report to Congress is available here.

Homes Sales (000s, AR) July June Y/Y 2003 2002 2001
New Single-Family 1,134 1,211 -1.9% 1,089 976 907
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