“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
WASHINGTON (AP) — The number of people who bought new homes fell
for the third straight month in July, putting sales on track to
finish this year as the worst on records dating back half a
century.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
Sales of new homes fell nearly 1 percent in July to a seasonally
adjusted annual rate of 298,000, the Commerce Department said
Tuesday. That’s less than half the 700,000 that economists say
represent a healthy market.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
Housing remains the weakest part of the economy. Last year was the
worst for new-home sales on records that go back nearly 50
years.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
While new homes represent less than one-fifth of the housing
market, they have an outsize impact on the economy. Each home built
creates an average of three jobs and $90,000 in taxes, according to
the National Association of Home Builders.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
Analysts said the report was further proof that the housing market
is stuck in the doldrums.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
“How much longer can we flat-line on housing?” said M. Cary Leahey,
senior economist at Decision Economics.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
All types of home sales remain weak. Sales of previously occupied
homes fell in July for the third time in four months, and they are
trailing last year’s 4.91 million sales, the fewest since 1997. In
a healthy economy, people buy roughly 6 million existing homes
annually.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
High unemployment, larger required down payments and tougher
lending standards are preventing many people from buying
homes.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
Plunging stocks and a growing fear that the U.S. could tip back
into another recession are also keeping people from entering the
troubled housing market.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
A report last week on sales of previously owned homes showed that
more sales than usual fell apart at the last minute, a sign that
many buyers may be nervous about the economy. At least 16 percent
of deals were canceled head of closings last month – four times the
rate in May.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
Foreclosures and short sales are forcing down prices. A short sale
is when a lender accepts less than what is owed on the
mortgage.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
Those homes are selling at an average discount of 20 percent, and
they lower neighboring values. That’s made many re-sales a bargain
compared with new homes, creating an average 30 percent disparity
in prices.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
Sales of new homes doubled in the Northeast in July, but the region
has the weakest sales in the country by far. In the South and West,
sales fell 7.4 and 5.9 percent, respectively. Sales rose 2.4
percent in the Midwest.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
The median price of a new home fell more than 6 percent to $222,000
nationally. But it is still roughly 27.5 percent higher than the
median price of a re-sold home, which was $174,000 in
July.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
The number of new homes for sale at the end of the month dropped to
a record low of 165,000, down 0.6 percent from June. At the July
sales pace, it would take 6.6 months to exhaust the current supply.
Economists consider a 6-month supply a normal level, indicating
that builders are heavily cutting back construction.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
Sales of new homes have fallen 18 percent in the two years since
the Great Recession officially ended.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
A telling sign of how bad things have gotten for the housing
industry: Prices have dropped more since the recession started, on
a percentage basis, than during the Great Depression of the
1930s.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
And it took 19 years for prices to fully recover after the
Depression.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
about our“http://hosted2.ap.org/APDEFAULT/privacy”>Privacy
Policy
