New home sales up more than 25 percent from a year ago
Jul 27 2016
With a downward revision to April's pace, and an upward revision to May's, the pace of new single-family home sales in the USA ticked up 3.5 percent in June to an annual rate of 592,000 sales, which is 25.4 percent higher versus the same time past year (472,000) and the fastest pace since February 2008.
New homes are shown under construction at Lake Las Vegas on Sunday, April 10, 2016, in Henderson.
The report, which is based on relative small sampling of contract signings, carries a wide margin of error, however.
"This report should be viewed as a lens through which to see the labor market and, along with the July readings on initial jobless claims, it continues to signal solid improvement in the employment situation", said John Ryding, chief economist at RDQ Economics in NY. She also noted that the strong numbers have come despite higher prices. This June, only 31 percent of new homes sold were completed, indicating that builders are being more conservative.
Prices continue to march well ahead of the average rate of wage increases.
The median price jumped to $306,700 in June, 6% higher than a year ago. Price gains are noticeably cooling off in some major cities, like NY and Washington, the Case-Shiller report said.
The housing market is continuing to rebound. However, we unfortunately aren't seeing signs that builders are expanding offerings of more affordably priced homes. "Fortunately, low mortgage rates so far have kept things relatively affordable". This is a 3.5% hike from the upwardly-revised May rate of 572,000, and is 25.4% above June 2015, when the estimate was 472,000. "And while we do not expect any change from the Fed's current wait-and-see mode, the resiliency in household sentiment will underpin their confidence in eventually putting rate hikes back on the table". Just 4.9 months' supply of new homes is listed for sale, well below this historic average of six months.