Economy Watch: New Home Sales Drop in July
- Aug 26, 2014
Sales of new single-family houses in July 2014 were at an annualized rate of 412,000 units, according to the Census Bureau and HUD on Monday. That’s 2.4 percent below the revised June rate of 422,000, but still 12.3 percent higher than during July 2013.
July was weaker than expected, but sales in June and May were revised upward. In June, the revision was from 406,000 units to 422,000, and in May from 442,000 units to 454,000. The two months represent a combined upward revision of 33,000 units. Still, a sales range in the 400,000s is historically low. During non-recessionary periods before the 2000s bubble, sales of 600,000 to 800,000 units were more the norm.
Also, according to the bureau, the number of new houses for sale nationwide at the end of July was 205,000. This represents a supply of six months at the current sales rate, which is at the upper limit of a “normal” supply of for-sale housing. During the worst of the recession, there was more than 12 months’ supply of housing on the market.
Black Knight reports declining home price appreciation
In other housing news, the data and analytics division of Black Knight Financial Services (formerly the LPS Data & Analytics) released its latest Home Price Index report on Monday, based on June 2014 residential real estate transactions, which put the month-over-month increase in U.S. home prices at 0.8 percent. Since June 2013, prices have increased 5.5 percent, which represents a continued slowing-down of price appreciation. The year-over-year increases for most months in 2013 were over 7 percent, and in both August and September of that year, annual increases peaked at 9 percent, but they’ve been sliding ever since.
The metro area with the largest appreciation in July was Reno, Nev., coming in at 1.9 percent; and New Haven, Conn., and Greeley, Colo., were tied for second at 1.5 percent. Among very large metros, Dallas turned in the most appreciation in July, 1.2 percent, with Chicago and New York not far behind at 1.1 percent for the month. A few metros are seeing price declines, and in July, they all happened to be in North Carolina: Durham, Winston, Wilmington and Greensboro.
All 20 largest states and 40 largest metros again show month-over-month growth, with Nevada showing the largest monthly gain among states, while Colorado and Texas hit new highs. The Black Knight index uses the company’s property and loan-level databases to produce an analysis of non-distressed home prices every month for each of more than 18,500 U.S. Zip codes.
Wall Street started the week in good spirits on Monday, with the Dow Jones Industrial Average gaining 75.65 points, or 0.44 percent. The S&P 500 advanced 0.48 percent and the Nasdaq was up 0.41 percent.