New home sales in Midwest up fifty percent in June from month before

dennis-norman-st-louis-realtor-real-estate-new-home-salesToday, the U.S. Department of Housing and Urban Development and U.S. Census Bureau released new home sales data for June 2012 and while the rest of the country reels from a decrease of 8.4 percent in the new home sales rate from the month before (seasonally adjusted), here in the Midwest we can celebrate an increase of almost 15 percent in the new home sales rate to 55,000 (seasonally adjusted annual rate) from 48,000 the month before and an increase of 50 percent in actual new home sales in June in the Midwest to 6,000 new homes sold from 4,000 the month before.Nationally, the seasonally-adjusted new home sales rate for June was 350,000 homes, down from a revised rate of 382,000 homes the month before. The supply of new homes on the market increased to a 4.9 month supply from a revised 4.5 months the month before. The median new home price decreased almost 2.0 percent to $232,600 from a revised median price of $237,100 the month before and decreased 3.2 percent from a year ago when the median new home price was $240,200.

My Mantra

As has been my long-running mantra, I don’t like “seasonally adjusted” numbers and “rate” of sales. Why, for one I can’t figure out how in the world they compute the numbers. Second, I just don’t think discussing the “rate” of new home sales paints a realistic picture of the market.

Here is the raw data, the ACTUAL new homes sold- no fluff, no “adjusting” For June 2012:

  • 33,000 new homes sold, down from 36,000 the month before and up from 28,000 a year ago.
    • As usual, the South had the majority of the new home sales with 17,000 this month (51.5 percent of the total in US) down from 19,000 the prior month.
    • the west region had 9,000 new homes sold, the same as the prior month.
    • the Midwest had 6,000 new homes sold a fifty percent increase from the month before when there were 4,000 homes sold.
    • The Northeast had 1,000 new homes sold a seventy five percent decrease from the prior month when there were 4,000 new homes sold.
  • New Homes in the US in sold during the month been for sale for a median time of 8.0 months since the homes were completed the same as in the prior month.

What’s in store for 2012?

Even though the numbers for June are down, I’m still feeling pretty good about my forecast of between 304,000 – 334,000 new homes to be sold in 2012. After all, here we are half way through 2012 with 190,000 homes sold, an increase of 20 percent from last year at this time, which, if that trend continued, would put us 20 percent over last years home new sales of 306,000 which works out to 367,200 new homes sold, even higher than my forecast. However, the current trend is a rate of 350,000 new homes sold and I expect that to drop given some continued instability in the market, so I’m sticking with my projection at this point.

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