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Economy in Brief

U.S. New Home Sales Gain As Prices Fall, Again
by Tom Moeller July 27, 2009

Home buyers know a good deal when they see it, and looks like that's what buoyed sales of new homes last month. June sales of new single-family homes increased 11.0% from May to 384,000 after two months of modest increase. Though the latest sales level was the highest since last November, sales remained down by nearly one-quarter from last June and by nearly three-quarters since the 2005 peak. June sales outpaced Consensus expectations for sales of 352,000 units. The new home sales figures are available in Haver's USECON database.

The firming of home sales last month came as the median sales price fell 5.8% from May to $206,200. That decline reversed virtually all of the gains during the prior two months and left prices down 21.5% from their 2007 high.

The increase in home sales last month was led by a 43.1% increase in sales in the Midwest. That came on top of a firm gain during May. Sales in the Northeast also jumped. The 29.2% m/m increase brought them to the highest level this year. In the West sales also were quite strong and they rose 22.6% to their highest since July of last year. Sales in the South did not share the good news. They fell 5.3% to near the record low.

Price weakness again helped move the inventory of unsold homes which is off by one-half since the peak during 2006. In each of the country's regions, inventories are down by roughly one-third just during the last year.Moreover, the month's supply of new homes for sale also has dropped. Despite the low sales rate, in June the months' supply of inventories fell to its lowest level since last July of 2007.

IMF Plans to Inject $250 Billion Into Global Economy from the International Monetary Fund can be found here.

The current economy and the outlook from the Federal Reserve Bank of San Francisco is available here.

US New Homes June May Y/Y 2008 2007 2006
Total Sales (SAAR, 000s) 384 346 -21.3% 479 768 1,049
  Northeast 31 24  -11.4 35 64 64
  Midwest 73 51 5.8 69 118 161
  South 177 187 -34.4 264 408 559
  West 103 84 -9.6 111 178 266
Median Price (NSA, $) 206,200 219,000 -3.4 230,408 243,742 243,067
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