August 27, 2014

New-home sales down in July

Aug. 26, 2014 – New-home sales fell by 2.4 percent from 422,000 annualized units in June to 412,000 in July, but increased by 12.3 percent from a year ago.

NAFCU Staff Economist Doug Christman analyzed data from the Census Bureau for a Macro Data Flash and found that a decline in home affordability over the past year has contributed to a slower pace in new-home sales. Christman wrote, "Housing starts improved significantly for the month, which should translate into larger inventory levels later in the year. Improvements in the labor market and loosening credit standards are expected to help the housing market improve throughout the year."

The South was the only region to see new-home sales increase in July – by 8.1 percent – and also the only region where sales rose overall from last year – by 33.2 percent. Sales in the Northeast decreased by the most both in July – by 30.8 percent – and over the past year – by 43.8 percent.

The median new-home price, non-seasonally adjusted, went down from $280,100 in June to $269,800 in July – but increased compared to last year's median price of $262,200.

Christman noted earlier this month that privately owned housing starts – or homes on which construction has begun – went up by 15.7 in July, which is the highest pace since November 2013.