June New Home Sales, a measure of contract signings of new homes and thus post tax credit, totaled 330k, 20k more than expected but May was revised down by 33k to 267k, the lowest since at least 1963 where data goes back to. The 330k sales level combined with a drop of 3k homes for sale to 210k, brought the months supply down to 7.6 from 9.6 in May but still up from 6.1 in Apr. The West was the only region with a decline as that part of the country faces the biggest competition from foreclosures. The median new home for sale sold for $213,400, down .6% y/o/y and 1.4% m/o/m. Bottom line, while the figure was better than expected, new home sales make up less than 10% of the overall industry with existing homes making up the balance. It’s good to see a pick up in new home sales but an overall market that still has way to much inventory does not need too many new homes built.
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