New Home Sales Down Slightly but Median, Mean Home Prices Jump

New home sales were down slightly inrnAugust compared to July, slipping 0.3 percent to a seasonally adjusted annualrnrate of 373,000 units and were 27.7 percent above the estimate of 292,000 inrnAugust 2011.  July sales were revised uprnfrom the originally reported annual rate of 372,000 to 374,000.  On a non-seasonally adjusted basis there werern31,000 homes sold during the month compared to 34,000 in July and 25,000 onernyear earlier.</p

The median price of a new home sold inrnAugust was $256,900 compared to $231,100 in July and $219,600 in Augustrn2011.  The average sales price last monthrnwas $295,300 compared to $270,600 and $259,300 in the two earlier periods.</p

The inventory of unsold new homes at thernend of August totaled 141,000, unchanged from July.  This represents a 4.5 month supply at therncurrent pace of sales.  One year ago therninventory stood at 161,000, a 6.6 month supply.</p

New Home Sales</p

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On a regional basis, the annual rate ofrnsales in the Northeast was 36,000 units, an increase of 20 percent from Julyrnand 56.5 percent from one year earlier.  Inrnthe Midwest sales were up 1.8 percent to 56,000 units, a 16.7 percentrnimprovement year-over-year.  The rate ofrnsales in the West increased 0.9 percent to 107,000 units annually, a 64.6rnpercent improvement from August 2011. rnThe rate in the South however decreased 4.9 percent to 174,000 units butrnremained 11.5 percent above the rate in the same period in 2011.</p

Omer Esiner, Chief Market Analyst,rnCommonwealth Foreign Exchange, Washington said of the data, “We care aboutrnthe housing numbers a little bit more these days given the increasing signsrnthat the sector is at or near a bottom. It’s a key element in the overallrneconomic recovery and one that could signal that conditions on the whole arernimproving. This number will have very little impact on markets as the focus rightrnnow is squarely on developments in the euro zone.”</p

T. Doug Dale, Chief Investment Officerrnfor Security Ballew in Jackson, Mississippi said, “It’s a continual amountrnof evidence that in spite of low interest rates we still have a dysfunctional marketrnbecause you have a lot of people who still can’t get refinancing or sell theirrnhouse because it is underwater. It’s still a meaningful enough amount ofrnhousing stock that might explain that here we are at 50-year low mortgage ratesrnand are not seeing the housing market just take off.”

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