"Economists are pessimists: they've predicted 8 of the last 3 depressions."
--Barry Asmus

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Tuesday, July 26, 2011

New Home Sales

New Home Sales, an annualized look at overall sales of newly constructed homes, is another one of those powerful market-moving forces.  The Street tends to love (and fear) this report because of the potential trickle-down effect it has on the economy.  New home purchases mean new mortgages (so money is being put to work).  They also mean new durable and non-durable goods purchases, insurance purchases, and so on, all of which translates into consumer spending, which translates into GDP.
Of course, that's the positive side.  If new home sales drop, then that implies that all of that slows down.  So let's hope we won't see that.  Certainly, the Econoday-surveyed analysts aren't expecting that result:  they're looking for 321k sales, up from May's 319k sales.
The actual data comes from a joint New Residential Sales in June 2011 press release issued by the US Census Bureau and the US Department of Housing and Urban Development.  And they do not bring the happy.  May's figures have been revised downwards to 315,000 sales, and June is being reported at an expectations-missing 312,000.
Some other interesting bits of data:  the median sales price of new houses sold in June was $235,000, and the average price was $269,000.  There are currently 164,000 new houses for sale as of the end of June, representing a 6.3 month supply at the current sales rate.

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