New single-family home sales rebounded from disappointing June data, reaching a seasonally adjusted annual rate of 507,000, according to estimates released jointly today by the U.S. Census Bureau and HUD.
The June data determined that new single-family home sales were at a seasonally adjusted annual rate of 481,000, 6.8 percent below the revised May rate of 517,000 and is 18.1 percent above the June 2014 estimate of 408,000.
"Today’s housing data releases of New Home Sales and Case-Shiller & FHFA Home Price indices remind us that while the stock market can fluctuate wildly, real estate is slow and steady and has returned to very healthy conditions," Realtor.com Chief Economist Jonathan Smoke said. "The main holdback to increased sales remains supply, but that’s precisely why home prices are rising consistently at above normal rates. The median new home price, $285,900 in July, increased for the first time since February, which is a hint that part of the lack of growth is a result of builders not fully offering more options at affordable price points. For the new home market to completely recover to normal levels, the entry level buyer must be embraced. Although the monthly observation of new home sales is not statistically significant, the annual observation is, showing that new home sales are up over last year by over 20 percent."
Sales of new single-family houses in July 2015 were 5.4 percent above the revised June rate of 481,000 and 25.8 percent above the July 2014 estimate of 403,000, the report stated.
"New home sales showed a respectable rebound of almost 26 percent annual growth in July after disappointing with June’s drop and downward revisions for three previous months," said Selma Hepp, Trulia's chief economist. "Volatility is common for new home sales, but as other housing data released last week have shown, the housing recovery is making steady strides forward. The robust improvements in last week’s new housing starts numbers are especially encouraging for new home sales going forward with single-family starts growing at its fastest pace since the recession."
"More existing homes on the market will help feed the first time home buyer delayed demand as well as free up current home owners to buy a new home."
The median sales price of new houses sold in July 2015 was $285,900, while the average sales price was $361,600.
"Actual sale prices have increased because the composition of homes sold has shift away from starter or first time buyer homes and toward move-up buyers," said David Crowe, NAHB's chief economist and SVP. "At the same time, builders are facing higher costs for labor and lots. That trend will continue as the home building industry continues to expand and must pay higher prices for the resources needed. Material costs have remained calm as the world economy slows and demand from other markets have cooled."
New home inventories increased in July to 218,000, the highest level since March 2010, the report said. This represents a supply of 5.2 months at the current sales rate.
"Inventories of existing homes, however, have not improved significantly for several years," Crowe said. "More existing homes on the market will help feed the first time home buyer delayed demand as well as free up current home owners to buy a new home."
Hepp added, "Slow new home sales, however, reflect both demand and supply side issues. With builders focused on higher-end construction, many first-time buyers, who typically gravitate towards more affordable homes, are being excluded from the market."