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2008 Economic Calendar |
New home sales measure the number of newly constructed homes with a committed sale during the month. The level of new home sales indicates housing market trends and, in turn, economic momentum and consumer purchases of furniture and appliances. Why Investors Care
| Released on 9/27/07 For Aug 2007 | ||||||||||||
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Highlights
Housing continues its free fall with August's new home sales dropping a whopping 8.3 percent to an annual rate of 795,000 from a downwardly revised July rate of 867,000. Year-on-year sales were down 21.2 percent in the month. Weakness was in the South and West, which fell declined 14.7 percent and 20.8 percent, respectively. Sales nationwide were hurt by the August credit crunch but the West region was particularly hard hit by the lack of liquidity for jumbo loans. The Northeast and Midwest actually posted gains of 42.3 percent and 20.5 percent, respectively.
Supply on the market rebounded sharply to 8.2 months from 7.6 months in July, indicating that builders need to cut back on construction and start thinking about some heavy price discounting. That discounting may have already started as the median sales price fell 8.3 percent in August to $225,700 from $246,200 in July. The median sales price is down 7.5 percent year-on-year.
Housing has a long way to go before recovery begins. For the bond market, today's numbers may help offset some of the strong news with the sharp decline in initial jobless claims.
New home sales edged higher in July to an annual rate of 870,000, up 2.8 percent from a slightly upward revised June rate of 846,000. But levels remained weak with year-on-year sales down 10.2 percent in the month. As with existing homes for sale, supply is still a problem for new homes but not quite as much. Supply on the market edged back slightly to 7.5 months from 7.7 months. The markets have largely stopped believing the home prices due to the drop in low in sales pushing up the median price. The median price for a new home rose 3.9 percent to $239,500 in July. Year-on-year, the median price is up 0.6 percent.
New home sales Consensus Forecast for August 07: 0.835 million-unit rate
Range: 0.790 million to 0.870 million-unit rate
![[Chart]](chart.gif)
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There is no question that lower interest rates boost home sales. Other factors also impact housing decisisions, such as employment and income growth, and wealth stemming from stock market gains. |
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