New home sales surge 9.6% in July
July new home sales figures were released this morning. Let's get straight to the numbers:
* New home sales surged yet again, by 9.6% to a seasonally adjusted annual rate of 433,000 from an upwardly revised 395,000 in June. That was better than the average forecast of economists polled by Bloomberg, who were expecting 390,000 sales. Regionally, sales gained in three out of four areas of the country. They rose 1% in the West, jumped 16.2% in the South, and surged 32.4% in Northeast. Sales fell 7.6% in the Midwest.
* The raw number of homes for sale continued to decline, falling to 271,000 from 280,000 in June. That's the lowest reading going back to March 1993. The months supply at current sales pace indicator of inventory dropped to 7.5 from 8.5.
* The median price of a new home dipped slightly to $210,100 from $210,400 in June. On a year-over-year basis, prices fell 11.5% from $237,300.
July was another month of improvement in housing. Not only did sales come in much hotter than expected, but the raw supply of new homes for sale dropped to its lowest level in more than 16 years.
Overall supply levels remain high, once you factor existing homes into the mix. We'll be dealing with a continued influx of foreclosed property over the next 12-18 months, too. But this is clear evidence the dramatic cut back in housing starts, plus increasing consumer confidence and the targeted tax cut for first-time buyers, is restoring stability to the new home market.