Jul 28 2005
Sales of newly built single-family homes surged to an all-time seasonally adjusted annual rate of 1.374 million units in June, according to estimates released today by the U.S. Commerce Department.
The rate was 4.0 percent higher than the upwardly revised sales pace set in May, and 14.0 percent above the June sales pace of a year ago.
“Builders expected June numbers to be very strong,” said David Wilson president of the National Association of Home Builders (NAHB) and a custom home builder from Ketchum, Idaho. “We survey single-family builders regularly, and they indicated that they were solidly optimistic about July.”
“The housing market turned in another solid performance throughout the second quarter, showing the strength of demand,” said NAHB Chief Economist David Seiders. “A strong economy and favorable market fundamentals, including a low and stable mortgage rate structure, growing employment and increases in household income, are driving the market.”
All four regions across the country posted a higher home sales pace in June from the month before. The Northeast posted a 7.2 percent increase, sales in the Midwest were up 2.1 percent, sales in the South increased 5.1 percent, and sales in the West nudged up 2.8 percent. The median price for new homes sold in June was $214,800, down from $227,400 in May.
“This probably reflects a change in the regional and market segment sales mix,” Seiders said. The inventory of new homes for sale was 454,000, a 4.0 months’ supply at the June sales pace.
“The inventory situation remains very manageable. More than 56 percent of the homes included in the inventory are under construction and a record 22.3 percent have not been started yet,” Seiders said. “Because of the limited amount of land available for building in many areas and in anticipation of increased mortgage rates in the coming months, builders’ inventories are very lean.”