New-home inventories slipping
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New-home sales continue to be sluggish, and prices weak, but it appears that builders are working their way through the glut of inventory. From Tom Petruno’s Money & Co. blog today:
‘The number of new homes for sale nationwide at the end of July totaled 416,000, down 5.2% from June, seasonally adjusted, the Commerce Department estimated. That was the biggest one-month drop since 1963, according to Gary Bigg, an economist at Banc of America Securities.
Unsold new-home inventories have tumbled for 15 consecutive months. The July total was down nearly 23% from 539,000 in July 2007.
‘The trend in declining homes for sale suggests that home builders are having some success in working off unintended inventories,’ Bigg noted.
Even after falling in absolute terms for 15 months in a row, new home inventories, as expressed in the time it would take to sell off the inventory, are above year-earlier levels. Inventory stands at 10.1 months of sales; a year earlier, it was 8.3 months of sales.
Other headlines from the new-home sales report, from Inman.com:
‘The sales rate for new single-family homes fell about 35.3 percent year-over-year in July, the U.S. Census Bureau and Department of Housing and Urban Development reported today, with the median new-home price dropping 6.2 percent and the average price down 4.1 percent.’
-- Peter Viles
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