WASHINGTON (8/26/14)--July sales of new single-family homes slipped 2.4% from June--a greater drop than expected by economic forecasters--according to figures released Monday by the U.S. Census Bureau and the Department of Housing and Urban Development.
The seasonally adjusted rate of 412,000 rests below June's revised number of 422,000, but it still sits 12.3% higher than last July.
New-home sales are trending flat, said analysts at Moody's (Economy.com Aug. 25), as over a longer time period, sales have largely fallen between 400,000 and 450,000 annualized units since the beginning of 2013.
The number of available new homes is the highest since mid-2010, which should ease the pressure on supply shortfalls. For context, at 205,000, this level is still lower than any period since the late 1960s except during the Great Recession and its aftermath, Moody's noted.
Financing challenges for first-time homebuyers also are slowing new-home sales, with mortgage credit still tight and income growth limited.
The trade-up market is better, Moody's said, with the share of homes sold in the $300,000 or more category rising steadily.
The median sales price of new homes sold in July was $269,800--up 3% year over year. With an adjusted estimate of new houses for sale, there is a six-month supply at the current sales rate.
"While housing data is likely to remain choppy over the coming months, with affordability remaining high, mortgage rates extremely low, and labor market activity accelerating, we expect the housing market trajectory to continue gradually improving," said Gennadiy Goldberg, U.S. strategist at TD Securities (MarketWatch Aug. 25).