NAHB’s Crowe: ‘Low rates haven’t helped home sales’

David_Crowe_file_photo_credit__BloombergCNNMoney reports that new-home sales fell once again in July, the third straight month of declines. The seasonally adjusted annualized rate of 298,000. This represents a modest 0.7% drop from a downwardly-revised rate of 300,000 homes sold in June, according to the Census Bureau, but up 6.8% from July 2010 rate of 279,000. “We’ve been bouncing around the 300,000 level for months, for years, really,” said David Crowe, the chief economist for the National Association of Home Builders. “It reflects continued buyer concern with the weak economy.” Crowe said home sales might weaken even more in the aftermath of the debt-ceiling debate, the downgrading of U.S. debt and the subsequent volatility in the financial markets. “We might see August figures drop because of the market turmoil and the uncertainly it creates in consumers,” he said. The median price for a new home sold in July was $222,000, down about 5.5% from June but up 8.8% from 12 months earlier. Historically low interest rates do not seem to be helping. Applications for mortgages have spiked, but most of the increase is for refinancing old mortgages rather than for purchasing new homes, according to Crowe. Meanwhile, compare this to recently released MHI statistics on manufactured housing shipments, which are currently around the 46,000 seasonally adjusted annual rate (SAAR). The manufactured housing SAAR would represent about 13% of single family housing starts, while MHI statistics suggest that the median market share in the past 20 years for manufactured housing has been closer to 21% of all single family housing starts.

(Photo credit: Bloomberg)


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