Sales of new single-family houses in July fell 0.7% from June to a seasonally adjusted annual rate of 298,000, the lowest level in five months, the U.S. Census Bureau and Department of Housing and Urban Development reported Tuesday. The rate remained 6.8% above July last year, which was slowed by the expiration in June 2010 of the federal homebuyer tax credit.
The rate was below the 315,000 expected by Wall Street. The annual sales rate estimate for June, meanwhile, was revised downward from 312,000 to 300,000.
The median sales price of new houses sold in July 2011 was $222,000, down from $236,800 in June but flat with May, down $2,700 from April, and up from $212,100 last July. The average sales price was up $300 from June at $272,300 but up from $252,100 in July 2010.
The seasonally adjusted estimate of new home inventory at the end of July was 165,000, a 6.6-month supply, also flat with the previous three months.Median months on the market slipped back to 9.4 from 10 in June and 11.2 last July.
Sales were mixed regionally. The usually volatile Northeast posted a 100% increase to an annual sales rate of 28,000 homes, 3.4% below last July.Sales in the Midwest rose 2.4% to a rate of 43,000, flat with July 2010. The South dropped 7.4% to a rate of 163,000, also flat with last July. The West was off 5.9% to 64,000, 45.5% ahead of last July.
Unadjusted, an estimated 27,000 homes were sold during the month, 3,000 in the Northeast, 4,000 in the Midwest, 15,000 in the South and 6,000 in the West.
Adam Rudiger, home-building analyst at Wells Fargo, said in a research note, "In the 15 months since the expiration (for orders) of the federal homebuyer tax credit in April 2010, monthly (SAAR) new home sales achieved their 15 lowest readings on record (since 1963), highlighting how depressed selling conditions for single-family new homes are. We have maintained that easy 2010 comparisons in the back half of the year are insufficient in our view to generate an annual increase in new home sales, likely making 2011 a new record-low year."
Stephen East at Ticonderoga Securities focused on the regional data, of which he said, "Unfortunately, results below the 'headline' were worse than we expected with positive metrics this month being driven solely by the Northeast, while the two markets important to builders--the South and West--were down much more than the headline number."
Michael Rehaut at J.P. Morgan was a bit more upbeat: "We continue to believe that housing demand effectively remains near its cyclical trough and is unlikely to retest its 4Q08/1Q09 lows, absent another material recession.Moreover, we believe supply continues to remain manageable, as existing homes for sale are 20% below peak levels and foreclosures continue to liquidate at a moderate pace."