New home sales drop again in July; 2011 new home sales continue on track to be worst year ever

Dennis Norman, St Louis Realtor, New Home SalesToday, the U.S. Department of Housing and Urban Development and U.S. Census Bureau released new home sales data for July 2011 showing a decrease of 0.7 percent from the month before, and an increase of 6.8 percent from a year ago. The seasonally-adjusted new home sales rate for July was 298,000 homes, down from an adjusted rate of 300,000 the month before and is a rate that if we finish 2011 at will make 2011 new home sales the lowest since the Commerce Department began keeping track of sales in 1963.

The supply of new homes on the market remained at a 6.6 month supply the same as the month before. The median new home price decreased for the month to $222,000, a 6.3 percent decrease from a revised median price of $236,800 the month before and an increase of 4.7 percent from a year ago.

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 July, 2011:

  • 27,000 new homes sold, a 3.6 percent decrease from the month before, and a 3.8 percent increase from a year ago when there were 26,000 new homes sold.
    • As usual, the South had the majority of the new home sales with 15,000 this month (55.6 percent of the total in US)
    • the west region had 6,000 new homes sold.
    • the Midwest had 4,000 new homes sold.
    • The Northeast had 3,000 new homes sold.
  • YTD there have been 186,000 new homes sold, a 10.58 percent decrease from this time last year.
  • New Homes in the US in sold during the month been for sale for a median time of 9.4 months since the homes were completed, a slight decrease from 10 months the month before.

My prediction for 2011…

Man, I must have my rose-tinted glasses on, but I’m going to go ahead and leave my forecast the same at 290,000 – 319,000 new homes sold in 2011.

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