Sales of newly built, single-family homes rose 11 percent in June to a seasonally adjusted annual rate of 384,000 units, according to the U.S. Commerce Department. Coming on the heels of an upwardly revised number for May, the gain marks a third consecutive month of improved sales activity.
“This report is good news that indicates the nation’s housing market may be in the process of turning the corner,” said Joe Robson, chairman of the National Association of Home Builders (NAHB), Washington, D.C., and a home builder from Tulsa, Okla. “That said, the key to moving us out of recession is to get Americans back to work. Congress and the Administration should know that housing can be a significant generator of good jobs. We need to make housing a priority in the recovery process, otherwise we could continue to bounce along a bottom for some time.”
“The big gain in home sales last month was reflected in three out of four regions and helped shrink the inventory of new homes for sale to its lowest level in years,” added NAHB Chief Economist David Crowe. “Even so, the pace of home sales in June 2009 was still more than 21 percent off the pace of sales in the same month last year, so we still have quite a way to go. The concern now is that complicating factors – particularly job losses, appraisal issues that are torpedoing more than a quarter of new-home sales, and the impending expiration of the first-time buyer tax credit – threaten to stifle the positive momentum.”
Lawrence Yun, chief economist for the National Association of Realtors, Chicago, also said the gain was good news. “The increase in existing-home sales occurred in all major regions of the country,” he said. “We expect a gradual uptrend in sales to continue due to tax credit incentives and historically high affordability conditions.”
Total housing inventory at the end of June fell 0.7 percent to 3.82 million existing homes available for sale, which represents a 9.4-month supply at the current sales pace, down from a 9.8-month supply in May. Raw inventory totals are 14.9 percent below a year ago. Builders factor local existing housing inventory levels into their decisions on when to start building new homes.
“This is another hopeful sign,” Yun said. “If we can keep the volume of sales above the level of new inventory, prices could stabilize in many areas around the end of the year.”