Economist Patrick Newport may have summed up Thursday's new residential sales data in the only light possible. "This is just another bad report. Housing is in a real bad losing streak," the Global Insight economist told BUILDER Online.
The report by the U.S. Census Bureau and the Department of Housing and Urban Development for August's new residential home sales revealed a drop from July of 8.3 percent to an annual pace of 795,000. August's rate also is down more than 21 percent from August 2006.
And as bad as the sales numbers may be-a seven-year low-Newport suggests that the figures could have been much worse.
"I really don't think the numbers reflect the credit crunch that hit in mid-August," he said. "I expect that the numbers are going to get a lot worse."
The data also reported that the median sales price of new homes sold in August 2007 was $225,700 and the average sales price was $292,000.
Home sales fell in two of the nation's four regions. There was a 21 percent dive in the West and a 15 percent drop in the South. On a positive note, sales increased 42 percent in the Northeast and 21 percent in the Midwest. But Newport warns that sometimes this particular report needs to be taken with a grain of salt because of the small sample size.
According to the report, inventory, which peaked at 573,000 homes in July 2006, now stands at 529,000 homes. And the seasonally adjusted estimate of new houses for sale at the end of August was 529,000 compared to 568,000 in August 2006. This represents a supply of 8.2 months at the current sales rate.
In summing up Thursday's report, Newport, once again, said what many builders don't really want to hear-the downturn is not over yet.
"The housing market has been in recession for nearly two years," he explained. "As miserable as the downturn has been, it is likely to take a turn for the worse over the second half of the year because of the recent turmoil in financial markets.
"When will housing turn around? [Global Insight's] view remains that this will not occur until [some time in] 2008. Until then, the news will remain grim."