New residential home sales were up yet again in July, increasing by more than 25 percent from last year; even more promising, though, was inventory levels, which continue to stabilize.
By Peter Ricci
New residential home sales increased 25.3 percent year-over-year in July to a seasonally adjusted annual rate of 372,000, according to the latest joint report from the U.S. Census Bureau and the Department of Housing and Urban development.
From June to July, new residential home sales also increased, rising 3.6 percent from June’s revised rate of 359,000. This is the second piece of positive home sales data in as many days, following yesterday’s optimistic existing-home sales report from the National Association of Realtors.
New Residential Home Sales Price and New Home Inventory
In addition to its data on new residential home sales, the Census Bureau also released information on the median sales price and inventory for the new home market.
- The median sales price for new homes was $224,200 in July, and the average sales price was $263,200.
- Though the Census Bureau does not compare new home prices month-to-month, we did a quick computation and found the median sales price was down 3.6 percent from June, and the average sales price was down 4.9 percent.
- The housing inventory for new homes at the end of July was 142,000, or 4.6 months of supply, a slight reduction from the 4.9 months in June. Still, as Bill McBride pointed out on Calculated Risk, less than six months supply is a normal supply.
What to Watch For – New Housing Inventory
As with yesterday’s existing-home sales, inventory will be the big thing to watch in the coming months as housing continues its slow, steady recovery.
Still, is worthwhile to point out just how far housing has come since 2008. For instance, new housing inventory – which was severely bloated following the bursting of the housing bubble – was 12.1 months supply in January 2009, so July’s 4.6 months represents a dramatic absorption of excess housing inventory by the market.
“Even though sales are still very low, new home sales have clearly bottomed,” McBride wrote.
And the only place to go from the bottom is up – so in the coming months, watch new residential home sales closely.