Interest Rate Roundup

Monday, August 29, 2011

Pending home sales dip in July

Pending home sales dipped in July, falling 1.3% on the month. That was roughly in line with expectations. Regionally speaking, sales fell 0.8% in the Midwest, 2% in the Northeast, and 4.8% in the South. They rose 3.6% in the West.

The pending home sales figures fall into the same "lackluster" category as all the rest of the recent housing data. Low mortgage rates are simply not enough to overcome all the obstacles out there -- including elevated unemployment, slumping consumer confidence, and the fear of declining prices down the road. I continue to expect little net progress for housing in 2011, with demand remaining anemic and the excess supply of homes only gradually coming down.

Tuesday, August 23, 2011

New home sales slip to 5-month low

New home sales figures for July were just released. They showed that sales dipped 0.7% to a seasonally adjusted annual rate of 298,000 from a downwardly revised 300,000 in June. That was slightly worse than the 310,000 sales economists were looking for, and the lowest level since February.

The raw number of homes for sale dipped against to 165,000 from 166,000 a month earlier, while the "months supply at current sales pace" indicator of inventory held at 6.6. The median price of a new home fell 6.3% from $236,800 in June to $222,000 in July. But that was still up 4.7% from a year earlier.

July was another lackluster month for the new home market, with sales slumping in the key West and South regions and pricing taking another turn for the worse. Early reports suggest sales may be even worse in August given the slump in the economy and the sharp drop in consumer confidence we've seen. It all goes back to the labor market -- If we can't create many more jobs in this country, we're not going to see a lasting rebound in housing demand. And it sure doesn't look like unemployment is going to fall sharply anytime soon.

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