The Commerce Department reported that sales of new single-family homes rose 11 percent in June, an increase that dwarfed economists’ expectations of a 3 percent increase. The pace of home sales rose to a seasonally adjusted rate of 384,000 a year, the highest level since November.
But the figures offered no sign that the housing market had returned to health.
Despite the monthly increase, sales of new homes were still down 21 percent from June 2008. The market is still swamped by a glut of for-sale houses. And new homes, facing competition from cheap foreclosures, are sitting on the market for close to a year before they sell, compared with a median time of six months on the market in 2007.
Monday, July 27, 2009
New Home Sales Show Sign of Recovery?
Maybe... But not so fast. Remember that this is being fueled by "bargain hunters" looking for deeply discounted foreclosure and short sale homes. Hopefully the buying spree will continue, but I don't know how it can if unemployment goes higher and wages fall lower.