New Home Sales in June 2009

In June 2009, there has been a rise in single-family home sales. These sales were 11% more in June than they were in May, which was much more than expected. However, sales are still below the levels of a year ago, and much lower than years before that. The sales for single-family homes in June 2009 were 21% lower than that of June 2008 according to the U.S. Department of Housing and Urban Development.

Just four years ago, in 2005, housing rates were three-and-a-half times higher than they were in June 2009, which shows that this improvement, though unexpected, is small in the overall outlook of housing numbers. Despite this, the report has been positive according to those who forecasted a much smaller rise for June 2009’s housing sales. Experts state that because of the recent foreclosures and existing home sales, it’s a positive turn in numbers. Some hope that this upturn in sales is an indicator that the economy is finally bottoming out.

Home builders are also taking this as a good sign. Many building are taking this news about market conditions as a reason for being optimistic about the future. Even the builder confidence from the National Association of Home Builders has risen this month due to the up rise in sales. These builders began to build single-family housing at a higher rate in June.

Despite the rise in new home sales, some analysts state that the new $8,000 tax incentive for first-time homebuyers may not be enough to influence the long term. They worry that this incentive will decrease the demand come December when it is no longer around.

The median, or middle price that homes sold for this June, was about $206,200; or 3% less than in previous months. The mean, or average price of houses sold in June was $276,900. At the end of the month, inventories of new homes dropped, whereas in May there were enough homes to last more than 10 months at the previous rate.

Experts still agree that this is a difficult time to try and sell a new home. Part of the issue is in the types of homes that are coming available. So-called “McMansions” that lie in the outer suburbs far away from work and the city are becoming harder to sell. Much like the switch to more fuel-efficient vehicles flooded the market with large trucks and sports utility vehicles, many of these large houses are going unsold. The switch to smaller homes closer to work has started, and the larger homes in the suburbs are becoming increasingly less popular.

Builders are starting to take fewer concessions to get new buyers. Before, one could possibly coerce a builder into higher-end appliances or more built-in features. Now it seems more builders are less likely to give in to such demands and make deals as the market is no longer flooded homes. The home inventory balance is keeping many new-home buyers from getting the deals they were once able to receive.

States such as Florida, California, Arizona and cities like Las Vegas are all feeling the excess of unsold homes on the market, where in most other states the new home markets are slowing down. If one wants to purchase a new home, they would have to have it built for them.

YOU MIGHT ALSO LIKE