July New Home Sales
Updated 25-Aug-10 10:29 ET
Highlights
The housing data continue to get worse. New home sales in July plummeted to 276,000 homes, the lowest level on record. - The Briefing.com consensus called for new homes sales to rise to 334,000, slightly above the pre-revised June level.
- June sales were revised down from 330,000 to 315,000.
Key Factors
- The data revealed a deepening in the payback period following the expiration of the homebuyers' tax credit in April. Unfortunately, it seems things can only get worse.
- July is typically the strongest sales month of the year, yet tax credits pulled sales forward into April. As sales follow their normal seasonal trends and decline through the end of 2010, it is very possible that new historical sales lows will be broken each month through the rest of the year.
- Further, the growth in housing starts from December 2009 through April 2010 will only add to the weakness in the sector as inventory levels are set to rise at the same time sales fall.
Big Picture
- As the first-time and existing homebuyers tax credit expired at the end of April, we anticipate a significant payback period through the end of the fall. Questions regarding the sustainability of housing sales will not be answered until close to the end of the year.
| Category |
JUL |
JUN |
MAY |
APR |
MAR |
| Total Sales |
276K |
315K |
281K |
414K |
384K |
| Inventory (months) |
9.1 |
8.0 |
9.2 |
6.3 |
7.1 |
| Median Price Y/Y |
-4.8% |
1.1% |
2.5% |
-4.5% |
9.6% |
