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Economy in Brief

U.S. New Home Sales and Prices Reverse Course
by Tom Moeller  July 24, 2014

New home sales during June fell 8.1% (-11.5% y/y) to 406,000 and reversed May's 8.3% gain to 442,000, initially reported as 504,000. Sales during April also were revised lower. The latest figure fell short of expectations for 480,000 sales in the Action Economics Forecast Survey. These volume numbers are quoted at seasonally adjusted annual rates.

The median price for a new home declined 3.2% (+5.3% y/y) to $273,500 and reversed most of its little-revised May increase. Despite this volatility, median home prices during Q2 were a record $276,233. The average price of a new home improved 3.5% (8.3% y/y) to $331,400 and made up declines during the prior two months.

Sales declines in June were broad-based and led by a 20.0% drop (-27.3 y/y) in the Northeast. Sales in the South were off 9.5% (-17.4% y/y). Sales in the Midwest declined 8.2% (+19.% y/y) while sales in the West fell 1.9% (-9.4% y/y).

The inventory of unsold homes increased 3.1% (23.1%) to the highest level since October 2010. The months' sales supply of new homes gained to 5.8 months, its highest since October 2011. The length of time to sell a new home was roughly steady m/m at 3.4 months. That was up from 2.9 months last August but down from 14.0 months at the end of 2009.

The data in this report are available in Haver's USECON database. The consensus expectation figure is from the Action Economics survey and is available in the AS1REPNA database.

U.S. New Home Sales Jun May Apr Y/Y % 2013 2012 2011
Total SAAR, 000s 406 442 408 -11.5 430 368 306
Northeast 24 30 21 -27.3 31 29 21
Midwest 67 73 69 19.6 61 47 45
South 209 231 224 -17.4 233 196 168
West 106 108 94 -9.4 106 97 72
Median Price (NSA, $) 273,500 282,600 272,600 5.3 265,092 242,108 224,317
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