New Homes Sales – Many Encouraging Details to Report
Sales of new single-family homes increased slightly in August to an annual rate of 429,000 from 426,000 in July. On a regional basis, sales of new single family homes rose 12.2% in the West, fell in the Northeast (-16.3%) and Midwest (-5.8%), and was unchanged in the South. Sales of new single-family homes have risen 30.4% from the record low of 329,000 units in January 2009.
The most noteworthy aspect of the report is that sales of new homes held steady in August compared with the sales tally a year ago (see chart 2).
The median price of a new single-family home stood at $195,700 in August, down 11.7% from a year ago. The largest drop in the median price occurred in February 2009 (-14.5%).
The inventory of unsold new homes fell to 7.3-month supply in August vs. 7.6-month supply in July. The median inventory of unsold homes during 1963-2001 is 6-month supply. The $8000 first-time home buyer tax credit and low mortgage rates have helped to stabilize sales of homes.
Aircraft Orders Bring Down Orders of Durables in August
The 42.2% drop in orders of new civilian aircraft in August after a robust 92.2% increase in the prior month led to the 2.4% drop in orders of durable goods in August vs. a 2.8% jump in July. Primary metals, machinery, and autos recorded gains in orders during August. Bookings of non-defense capital goods excluding aircraft fell 0.4% in August after a 1.3% decline in July.
Shipments of non-defense capital goods excluding aircraft, a proxy for equipment and software spending in the GDP report, dropped 1.9% in August after a 0.3% gain in the prior month. Inflation adjusted shipments of non-defense capital goods excluding aircraft in the July-August months fell 0.1% compared with the 14.5% drop in the second quarter. Real equipment and software spending in the GDP report dropped 8.4% in the second following double digit declines in the fourth quarter of 2008 and first quarter of 2009. The main take away is that equipment and software spending in the third quarter is mostly to post a small drop in the third quarter GDP report.
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