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Economy in Brief

U.S. New Home Sales Remain Near Record Low; Prices Fall to 2003 Level
by Tom Moeller   September 24, 2010

With no government help and no jobs growth, home sales remain mired. The Census Department indicated that August new home sales were even with July at 288,000. July's figure was revised up from 276,000 while May sales of 282,000 were the series' low. Expectations were for August sales of 295,000. The stability of home sales last month reflected varied changes across the country's regions. Sales in the Northeast rose slightly m/m and have bounced around the series' bottom for twelve months. Sales in the West also rose m/m. But in the Midwest and South sales continued to fall to new lows.

The low level of sales last month caused median home prices to fall to the lowest level since December 2003. The 1.2% y/y decline to $204,700 was accompanied by a slight rise in the average price of a new home to $248,800 (-3.5% y/y), also near the lowest since 2003.

At the current sales rate, the months' supply of unsold homes was roughly constant at 8.6, nearly the highest in a year. The latest remained well below the early-2009 high of 12.1 months. The inventory of unsold homes was down 21.4% from last year and down nearly two-thirds from the 2006 peak.

The data in this report are available in Haver's USECON database.

American Dream or American Obsession? The Economic Benefits and Costs of Homeownership from the Federal Reserve Bank of Philadelphia is available here.

US New Homes August July June Y/Y 2009 2008 2007
Total Sales (SAAR, 000s) 288 288 312 -28.9% 372 481 769
Northeast 35 30 35 -5.4 32 35 64
Midwest 34 46 47 -38.2 54 69 118
South 148 166 173 -28.2 201 264 409
West 71 46 57 -33.6 87 113 178
Median Price (NSA, $) 204,700 205,900 218,000 -1.2% 214,500 230,408 243,742
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