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"Actual" New Home Sales First 6 Months of 2012 vs. Prior Years; Reflections on the Housing Recovery
| July 26, 2012
| Mike Shedlock
Posted on 07/26/2012 12:09:52 PM PDT by Kaslin
New home sales unexpectedly plunged today, with the biggest drop in over a year.
New U.S. single-family home sales in June fell by the most in more than a year and prices resumed their downward trend, suggesting a set back for the budding housing market recovery.Actual New Home Sales
The Commerce Department said on Wednesday sales tumbled 8.4 percent to a seasonally adjusted 350,000-unit annual rate, the lowest rate in five months. The percent decline was the largest since February 2011.
May's sales pace was revised up to 382,000 units from the previously reported 369,000 units, taking some of the sting from the report.
Economists polled by Reuters had forecast sales at a 370,000-unit rate last month. Compared to June last year, new home sales were up 15.1 percent.
Reader Tim Wallace provides a look at actual new home sales, six-month running totals, not seasonally adjusted, not annualized, vs. prior years.
click on chart for sharper image
Reflections on the Housing Recovery
Even with today's reported decline, new home sales have likely bottomed on an annual, cumulative-total basis.
However, don't expect much in terms of recovery.
Debt overhang is immense, and student debt is particularly problematic. Lack of jobs coupled with high student debt is capping family formation. Kids out of college are deep in debt and holding off getting married, starting families, and therefore buying houses.
Moreover, home sizes will trend lower and price recovery will be anemic because of boomer demographics. Retired boomers looking to downsize have few buyers able or willing to buy.
Bank-owned real estate (REOs) and shadow inventory are hugely underestimated. That too will pressure prices and sales.
The good news is home sales will add to GDP.
The more realistic news is structural headwinds are immense, demographics are poor, and job prospects for college graduates are poor. The bottom in new home sales may be in, just don't expect anything close to a normal housing-led recovery, because it's not going to happen.
TOPICS: Business/Economy; Editorial; Government
KEYWORDS: obamarecovery; unexpected
posted on 07/26/2012 12:09:57 PM PDT
Me first! Me first! UNEXPECTEDLY!
posted on 07/26/2012 12:19:10 PM PDT
by null and void
(Day 1283 of our ObamaVacation from reality - Heroes aren't made Frank, they're cornered...)
To: null and void
There IS no housing recovery.
posted on 07/26/2012 12:29:42 PM PDT
(God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
Despite the negatives and relative low sales, homebuilders are recovering because they cut costs and bought cheap land during the recession.
Of course some jobs would do wonders for a real recovery.
Think of the money from hundreds of thousands of jobs just from the pipeline Obama killed. Or teh boost to gdp from more offshore oil drilling he prevented. Or the jobs lost to Obamacare and higher taxes, on and on.
posted on 07/26/2012 12:31:07 PM PDT
Comment #6 Removed by Moderator
A big part of this is the price of gas. Not only does declining gas prices allow people to consider moving, it also allows people to think it’s OK to live in the suburbs again.
Meanwhile, the price of food is going through the roof. Example: bananas were $0.49 a pound a year ago are now $0.59 a pound. A 20% increase, yet the official price of food barely goes up.
posted on 07/26/2012 12:54:16 PM PDT
More wonderful news. My house has lost a third of its value and I am in better shape than most.
posted on 07/26/2012 1:27:54 PM PDT
(Obama must Go. Sarah herself supports Romney.)
We just sold our house. It was on the market about 4 weeks and we got more than most of the comparable homes in the area were getting. Two reasons for this: we busted our butts to get the place move in ready, and clean and neat as a whistle and we were willing to settle in 4 weeks so the family could be in before school started.
Houses in our area are selling, but people are settling for less than they would have a year or two ago. They’ve had to face reality.
I fear that we are double dipping, so I’m so glad we sold before it starts to become more obvious.
posted on 07/26/2012 4:24:30 PM PDT
(Either the politicians fix our fiscal insanity, or the markets will.)
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