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Economy in Brief

U.S. New-Home Sales Off By Two-Thirds from Peak
by Tom Moeller August 26, 2008

Sales new single-family homes in July rose 2.4% to 515,000. The increase, however, merely recovered a 2.1% fall during June which was deeper than estimated initially. The level of sales in July was down 62.9% from the July 2005 peak. The latest level of sales fell short of expectations for 525,000.

By region sales in the South repeated their June decline and fell 2.5% and they are down 17.6% since December. In the Midwest the pace of monthly declines accelerated to 8.2% and they are off 9.5% this year. In the West sales rose 9.9% but that monthly increase still left them off 9.6% so far this year. Though sales in the Northeast rose by more than one-third they remained down 10.7% since December.

The median price for a new single-family home rose very slightly for the second consecutive month to $230,700 but prices still were off 6.3% y/y.

The number of new homes for sale again fell sharply, by 5.2% (-22.8% y/y). That reduced the inventory of unsold homes to the lowest level since late-2004. In each of the country's regions the inventory is down just short of one-quarter during the last year.

The month's supply of new homes for sale ticked lower m/m to 10.1 from an upwardly revised June level.

If Exchange Rates Are Random Walks, Then Almost Everything We Say About Monetary Policy Is Wrong from the Federal Reserve Bank of Minneapolis can be found here.

US New Homes July June Y/Y (%) 2007 2006 2005
Total Sales (SAAR, 000s) 515 503 -35.3 768 1,049 1,279
  Northeast 50 36  4.2 64 64 81
  Midwest 67 73 -36.2 118 161 203
  South 276 283 -35.8 408 559 638
  West 122 111 -42.7 178 266 356
Median Price (NSA, $) 230,700 230,100 -6.3 243,742 243,067 234,208
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