New home sales data from the Census Bureau showed a drop of 8.1 percent on a seasonally-adjusted basis. The decline since the beginning of the year comes to 11 percent.
The northeastern U.S. markets slowed sharply.
In June, and so far in July, we are back to a situation where home shoppers are shopping but a relatively small proportion of them are actually buying. This is explained in some cases by a long lead time (people taking longer to make a decision), and in other cases by a complete reluctance to buy.
Here is a look at the last year in New Home Sales by region showing sales have decreased slightly over the past few months.
In Southern California in particular, conversion rates are slipping, and traffic is still high.
According to our weekly data in Southern California, traffic is still running high relative to last year's levels, but conversion rates are sub-par, and still slipping.
A related story is last week's surprisingly weak read on housing starts. The real explanation seems to have been lost in the shuffle: icy weather conditions in the Deep South last winter slowed the pace of development (paving, infrastructure), exacerbating the shortage of lots in places like Raleigh-Durham.
Despite low conversion rates nationwide, hot markets are keeping sales up in some states. The strong Texas markets and active adult magnets in Florida have pushed the two to the top of the list for new home sales in 2014. Here is a look at the year-to-date top 10 states.
Top 10 States for New Home Sales in 2014
- Texas: 33,177 closings
- Florida: 19,416 closings
- California: 14,280 closings
- North Carolina: 10,249 closings
- Georgia: 7,280 closings
- Colorado: 5,602 closings
- Washington: 5,337 closings
- Arizona: 5,309 closings
- Virginia: 4,836 closings
- South Carolina: 4,345 closings
The Texas housing market is the shining star, having avoided most of the most severe gyrations of the past cycle, and having ridden a new wave of energy jobs. Florida has done well considering the huge number of foreclosures that emerged during the downturn, and California builders have been extremely busy as the bank-owned supply of homes has been absorbed.
Hear more about the current climate of new residential sales in an interview with Bloomberg Radio's the Hays Advantage here.
Learn more about markets featured in this article: Raleigh, NC.