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Now Can We Talk About Rising Rates Hurting Housing?!

by devteam August 23rd, 2013 | Share

New home sales in July were at the lowest level in ninernmonths the Census Bureau and Department of Housing and Urban Development saidrnthis morning.   Sales during the month were at a seasonallyrnadjusted annual rate of 394,000, down 13.4 percent from the revised June raternof 455,000. This is a massive ‘miss’ compared to the consensus of economists surveyed by Reuters which called for an annual pace of 490,000, and starkest evidence yet that the recent rise in rates is finally filtering through to the housing market.</p

The revision of June salesrnwas also significant as the number had originally been reported at 497,000rnunits.  The July figure was the lowestrnsince October 2012 when the rate was 365,000 units.  Even with the downturn, sales remained 6.8 percent higher than a year ago, when the annual pace was 369,000 units.  </p

New Home Sales</p

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The slump was felt nationwide.  Sales in the Northeast were down 5.7 percent,rnin the Midwest 12.9 percent, the South 13.4 percent, and the West 16.1rnpercent.  The West was also down by 7.8 percentrncompared to July 2012 and the Midwest was unchanged from that date.  The rate of sales was up 10.0 percent in thernNortheast and 16.4 percent in the South from sales a year earlier.</p

On a non-seasonally adjusted basis sales nationwide totaledrn35,000 compared to 43,000 in June and 33,000 one year earlier.  Sales had been in excess of 40,000 everyrnmonth since last November.</p

There were 171,000 homes for sale at the end of thernreporting period, a 5.2 month supply at the current rate of sales.  The inventory in June was 164,000 units; 4.3rnmonths.  Houses that sold during thernmonth had been on the market a median of 3.5 months compared to 4.1 months inrnJune and 6.4 months in July 2012.</p

The median price of a new home sold in July was $257,200 andrnthe average price was $322,700.  In Julyrn2012 the median and average prices were $237,499 and $282,300 respectively.

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About the Author

devteam

Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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