Sales of newly built, single-family homes rose 11 percent in June to a seasonally adjusted annual rate of 384,000 units, according to the U.S. Commerce Department.
Coming on the heels of an upwardly revised number for May, the gain marks a third consecutive month of improved sales activity. Whether it’s a great leap forward remains to be seen.
In fact, the number of sales on a seasonally adjusted basis–36,000–represented the weakest June sales since 1982.
And there are plenty of factors that suggest the cheery news needs to be taken with at least half a grain of salt. Among the numerous imponderables is the future mix of low-priced and higher-priced houses, the prospects for employment growth and the amount of time it has been taking for a property to find a buyer. The Wall Street Journal has done a nice survey of the skeptics. And you can find more up-to-date information about the housing markets and predictions by economists in my newsletter.
“The big gain in home sales last month was reflected in three out of four regions and helped shrink the inventory of new homes for sale to its lowest level in years,” commented Chief Economist David Crowe of the National Association of Home Builders in a release. Even he expressed some concerns:
“Even so, the pace of home sales in June 2009 was still more than 21 percent off the pace of sales in the same month last year, so we still have quite a way to go. The concern now is that complicating factors – particularly job losses, appraisal issues that are torpedoing more than a quarter of new-home sales, and the impending expiration of the first-time buyer tax credit – threaten to stifle the positive momentum.”
The number of newly built homes on the market declined for a 26th consecutive month in June, falling 4.1 percent to 281,000 units and marking a relatively thin 8.8-month supply at the current sales pace. That amount of supply, however, means it remains a sellers’ market nationally.
New-home sales rose by double-digits in the Northeast (29.2 percent), Midwest (43.1 percent), and West (22.6 percent) in June. Activity declined 5.3 percent in the South, the country’s largest housing market.
All in all, it certainly is much better than not that prices are going up rather than down. For now, I’d say I’m cautiously optimistic with emphasis on “cautiously.”
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022