Wednesday, September 28, 2011

New home sales fell in August

New home sales fell 2.3% in August compared with a month earlier:
New-home sales fell for the fourth-straight month in August to the lowest level in a half year as the bursting of the housing bubble continued to weigh on the U.S. economic recovery.

Sales fell 2.3% from a month earlier to a seasonally adjusted annual rate of 295,000, the Commerce Department said Monday. The pace was the weakest in six months, and the month was the seventh-worst on records dating to 1963. ...

Turmoil in financial markets after Standard & Poor's unprecedented downgrade of U.S. debt, fears of a renewed recession and Hurricane Irene all combined to keep buyers away in August. ...

New-home sales are down nearly 80% from their peak in July 2005. They remain far below healthy levels, which would be more than double August's rate.

Consumers have slowed their spending this year, pulling down economic growth and preventing unemployment from falling. Many people also can't get financing amid tight lending standards.
The Wall Street Journal didn't mention how sales compared with a year ago. The Los Angeles Times reports that new home sales were up 6.1% year-over-year, as if that's a bad thing:
The August read on new home sales showed properties selling at a seasonally adjusted annual rate of 295,000, down 2.3% from a revised July rate of 302,000 and just 6.1% above August 2010, according to the Commerce Department.
Meanwhile, MSNBC reports that 2011 is shaping up to be the slowest year on record for home sales:
Sales of new homes this year could hit the lowest levels in the nearly 50 years the government has been tracking the data. ...

Based on the trend for the first eight months of the year, sales this year are on track for about 302,000 units, which would be even lower than last year's record-low 321,000, said Patrick Newport, economist for IHS Global Insight.

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