The Census Bureau reported the annual rate of new home sales remained virtually unchanged in July at 298,000 down less than 1 percent from the revised June level of 300,000. The July rate puts sales right in the middle of the recent past. The average for the first half of 2011 was 303,500 while the average for the last half of 2010 was 295,500. There was an unusually large increase in sales in the Northeast, doubling sales from June to July but June was a 38 year low and July was a more modest 24% greater than the first half of 2011.
The number of unsold new homes set another record low at 165,000. Of those, 61,000 are completed and ready to occupy. By way of reference, in a more typical year, that would be the total number of single-family starts in Atlanta.
Median sales price rose 4.7% from July 2010 as the share of sales in the $200,000 to $300,000 range rose to 36% from a 2010 share of 30%. Some of this increase could be due to the increase in volume in the relatively more expensive Northeast region.
The July report pre-dates the federal budget drama of late July and early August that brought renewed uncertainty to the economy and to consumers. The continuation of that uncertainty into the rest of August does not bode will for a revival in home sales in August. But, the longer run economic growth potential remains positive albeit weak. The health of the housing market will continue to depend upon the health of the overall economy, and housing sales and construction await consistent advancements in the employment market.