New home sales drop in June; 2011 new home sales on track to be worst year ever

Today, the U.S. Department of Housing and Urban Development and U.S. Census Bureau released new home sales data for June 2011 showing a decrease of 1.0 percent from the month before, and an increase of 1.6 percent from a year ago. The seasonally-adjusted new home sales rate for June was 312,000 homes, down from 315,000 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 decreased from an adjusted 6.4 month supply the month before to a 6.3 month supply in June. The median new home price increased for the month to $235,200, a 4.0 percent increase from a revised median price of $222,000 the month before and an increase of 7.2 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 June, 2011:

  • 29,000 new homes sold, the same as the revised sales numbers for the month before, and a 3.6 percent increase from a year ago when there were 28,000 new homes sold.
    • As usual, the South had the majority of the new home sales with 17,000 this month (58.6 percent of the total in US)
    • the west region had 6,000 new homes sold.
    • the Midwest had 5,000 new homes sold.
    • The Northeast had 2,000 new homes sold.
  • YTD there have been 160,000 new homes sold, a 12.1 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 9.9 months since the homes were completed, an increase of 7.6 percent 9.2 months the month before.

My prediction for 2011…

After already taking a fairly pessimistic view for the year I had to adjust my new home sales prediction downward last month and now I’m kind of wondering if I’m still too optimistic (or should I say not pessimistic enough?…a glass half full, half empty question)..anyway I’m leaving my forecast the same at 290,000 – 319,000 new homes sold in 2011.

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