New Home Sales Fall to Record-Low Pace
New Home Sales Fall to Record-Low Pace
The US Commerce Department reported more bad news for the US housing market on Monday, indicating that sales of new homes fell in July to their slowest pace in five months. The report serves as a painful reminder that the housing market, so pivotal to a recovery in the overall economy, is still struggling to find some stability two years into the recovery from 2008's recession. According to the report, new home sales declined by 0.7 percent to a seasonally adjusted annual rate of 298,000 units.
The Commerce Department also revised June's pace down to 300,000. As for July, economists who took part in a recent Bloomberg News survey had projected that sales would be at a pace of 310,000, on average. Despite record-low interest rates, Americans are hesitant to buy new homes for a variety of reasons. For one, there is a tremendous oversupply of less expensive distressed properties luring buyers away from new homes. At the same time, there have been very little indicators that home prices have reached a bottom, leaving many Americans fearful that purchasing a new home would be a bad investment.
US builders, meanwhile, are less willing to begin new projects with prices continuing to drop and the ample supply of competition represented by the previously owned homes on the market. With the nation's unemployment rate hovering stubbornly above 9 percent and no signs of growth in the job market, analysts are not optimistic about real estate conditions improving any time soon. With July's sluggish selling pace, the market is now on pace to sell fewer new homes than last year, when 323,000 new homes were sold, the smallest amount on records dating back some 50 years.
The US Commerce Department reported more bad news for the US housing market on Monday, indicating that sales of new homes fell in July to their slowest pace in five months. The report serves as a painful reminder that the housing market, so pivotal to a recovery in the overall economy, is still struggling to find some stability two years into the recovery from 2008's recession. According to the report, new home sales declined by 0.7 percent to a seasonally adjusted annual rate of 298,000 units.
The Commerce Department also revised June's pace down to 300,000. As for July, economists who took part in a recent Bloomberg News survey had projected that sales would be at a pace of 310,000, on average. Despite record-low interest rates, Americans are hesitant to buy new homes for a variety of reasons. For one, there is a tremendous oversupply of less expensive distressed properties luring buyers away from new homes. At the same time, there have been very little indicators that home prices have reached a bottom, leaving many Americans fearful that purchasing a new home would be a bad investment.
US builders, meanwhile, are less willing to begin new projects with prices continuing to drop and the ample supply of competition represented by the previously owned homes on the market. With the nation's unemployment rate hovering stubbornly above 9 percent and no signs of growth in the job market, analysts are not optimistic about real estate conditions improving any time soon. With July's sluggish selling pace, the market is now on pace to sell fewer new homes than last year, when 323,000 new homes were sold, the smallest amount on records dating back some 50 years.
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