July New Home Sales were much weaker than expected at an annualized rate of 276k vs the forecast of 330k and is down from a revised 315k in June. The record low remains the 267k level in May. This measure of contract signings is the 3rd month without the benefit of a tax credit. Months supply rose to 9.1 from 8.0. The biggest declines were in the 2 regions with the most competition from foreclosures, the West and South. The median home price fell 4.8% m/o/m. The homebuilding and related stocks are again shrugging off awful housing data and a good sign that the current hangover distorted state of the housing market has been discounted but the banks, still highly exposed to home prices and correspondingly mortgage and HELOC debt, is just a few cents from its lowest of the year as measured by the BKX.
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