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Economy in Brief

New Home Sales Down, Inventory Ballooned
by Tom Moeller August 24, 2006

Sales of new single family home sales dropped 4.3% last month to 1.072M though a 0.9% June decline was revised shallower. Consensus expectations had been for July sales of 1.10M.

New home sales during the first seven months of this year fell 13.5% from the first seven months of 2005 and last month were 21.6% below the monthly peak last July.

Sales in the Midwest fell the hardest last month, down 21.3% (-35.4% y/y). Sales in the South also fell 8.0% (-12.4% y/y). In the Northeast sales rose a slight 1.8% (-42.9% y/y) and sales out West recovered 11.7% (-23.4% y/y.

The number of new homes for sale rose 1.1% m/m in July and rose 22.4% y/y. The year to year breakdown by region is as follows: Northeast, 32.5%; West, 30.0%; South, 27.9%; Midwest, -1.0%.

The median sales price of a new single family home fell 1.6% to $230,000, down 10.5% from the April peak.

U.S. New Homes July June Y/Y 2005 2004 2003
Total Sales (AR, 000's) 1,072 1,120 -21.6% 1,280 1,201 1,091
Median Price (NSA) $230,000 $233,800 0.3% $234,208 $217,817 $191,383
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