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Economy in Brief

U.S. New Home Sales and Prices Continue Lower
by Tom Moeller  August 25, 2014

The market for new homes hit a soft patch during the last two months. New home sales during July fell 2.4% (+12.3% y/y) to 412,000 following June's decline to 422,000, initially reported as 406,000. The figures compare to May's peak  of 454,000. Consensus expectations had been for 428,000 sales in the Action Economics Forecast Survey. These volume numbers are quoted at seasonally adjusted annual rates.

The median price for a new home declined 3.7% to $269,800, +2.9% y/y. Prices have fallen 5.9% from the peak two months ago which was revised higher to $286,600. The average price of a new home improved 2.1% (2.8% y/y) to a new peak of $339,100.

Sales declines in July reflected a 30.8% drop (-43.8% y/y) in the Northeast; sales in the West were off 15.2% (-3.3% y/y). Sales in the Midwest declined 8.8% (-1.9% y/y) but sales in the South improved 8.1%, up one-third y/y.

The inventory of unsold homes increased 4.1% (19.9%) to the highest level since August 2010, up 44.4% from the 2012 low. The months' sales supply of new homes rose to 6.0 months, its highest since October 2011. The length of time to sell a new home of 3.5 months was up from 2.9 months last August but down from 14.0 months at the end of 2009.

The data in this report are available in Haver's USECON database. The consensus expectation figure is from the Action Economics survey and is available in the AS1REPNA database.

U.S. New Home Sales Jul Jun May Y/Y % 2013 2012 2011
Total SAAR, 000s 412 422 454 12.3 430 368 306
Northeast 18 26 36 -43.8 31 29 21
Midwest 52 57 73 -1.9 61 47 45
South 253 234 236 33.2 233 196 168
West 89 105 109 -3.3 106 97 72
Median Price (NSA, $) 269,800 280,100 286,600 2.9 265,092 242,108 224,317
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