Data released today showed New Home sales rose 7% in June. The report had negative revisions to previous data. Analysts at Wells Fargo, point out that despite the rebound, sales remain disappointing. They added that much of the revision was because of the flood-ravaged Midwest.
Key Quotes:
“New home sales rebounded 7% in June to a 646,000-unit annual rate. Sales for the previous three months were revised down by a combined 55,000 units. While overall sales rose in June, virtually all of the increase came from the West, where sales jumped 50.4%. Sales also inched up 0.3% in the South but tumbled 26.3% in the flood ravaged Midwest and fell 4.2% in the Northeast.”
“The smaller than expected June rebound and downward revision to the prior data raises a number of questions about just how much of a lift lower mortgage rates will provide the housing sector.”
“The devastating floods that inundated parts of the Midwest this spring likely contributed to the sharp 26.3% drop reported for new home sales in that region during June. Sales for the prior three months were also revised lower by a combined 22,000 units, accounting for 40% of the overall revision. Sales in the Midwest through the first six months of this year are now running 10.8% below the same period last year. Some rebound from these flood-related declines should be evident during the second half of the year.
“The median price of a new home was $310,400 in June, which is roughly unchanged from its year-ago level. The average price of a new home fell 0.4% over the past year. The moderation in home prices is bringing buyers back to the market and helping clear the buildup in inventories that occurred late last year.”
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