The U.S. Census Bureau and the Department of HUD announced today that the new single family home sales for May 2008 were at a seasonally adjusted annual rate of 512,000. This was 2.48% less than April 2008 and 40.26% less than May 2007. Economists had correctly forecasted that sales would fall to 512,000.
There was 10.9 Months Supply for May up from 10.7 in April. Months Supply is the amount of time it would take to completely sell the new homes inventory if no new homes were built and if the sales pace continued as is. Supply and Demand is balanced at 6 months. The current level will continue to put pressure on home prices both for new homes and existing homes.
New home sales continued to be weak during what is usually the peak new homes selling season. Using 2001 and 2005 for comparison, sales for May are at just 40.0% of the level reached in May 2005 at the peak of the real estate cycle and are at 60.0% of the level in May 2001.
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