ARLINGTON, Va. — Increasing new home sales in the western part of the country could mean the housing slump is turning the corner, NAFCU Chief Economist Tun Wai forecast.
The figures for new home sales that came out on Friday were higher than expected at an increase of 2.8% but still slower than last year, Wai said. "The housing sector remains sluggish but there were gains in July for new homes sales in the western part of the country–there was an up tick of about 22.4%," he commented. "And the median new homes' sales prices are stabilizing. These are early signs that the housing slump may be near the end and, despite the turmoil of the financial markets, as the economy regains momentum the housing market should improve."
The median new home price, non-seasonally adjusted, increased to $239,500 in July representing a 3.9% increase from June and 0.6% over a year ago. However, sales in the Northeast were down significantly and the Midwest was down slightly month-to-month but inventory decreased by 2.6% from 7.7 months of supply in June to 7.5 months in July, 1.4% over July 2006. NAFCU is projecting an overall decline from 1.06 million units last year to 880,000 this year.
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The data on existing homes were not as positive, NAFCU's Macro Data Flash reported. Existing home sales decreased 0.2% in July, seasonally adjusted, as most economists had expected, and sales remained suppressed in all four regions compared to a year ago. July sales were the slowest pace since November 2002. Year over year, the median existing home prices was down 0.6% in July to $228,900, though condos did see a median price increase. NAFCU is predicting a gradual increase in the median existing home price by year-end. The inventory level of existing homes increased from 9.1 months of supply in June to 9.6 months.
NAFCU expects existing home sales to end the year at 6.10 million units, down from 6.48 million units in 2006.
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