New Home Supplies Remain Flat; Builders Not Over-Extending!

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Mortgage and Lending with Platinum Funding Group, Inc.NMLS-243033 NMLS 4195

 

New Home Supply 2008-2011

Sales of newly-built homes slipped in July, falling 1 percent as compared to June. Home buyers closed on a seasonally-adjusted, annualized 298,000 units, the lowest reading since February.

The supply of new homes, however, remained flat.

July’s 6.6 months of supply equaled June’s tally and remains near the multi-year low of 6.5 months set in May of this year. The figures suggest a new home market that’s finding its balance.

Builders are building to meet demand, and not much more.

The New Home Sales report may have read differently if not for the Northeast Region which doubled its sales units in July. The gains buoyed the broader data, re-affirming the importance of looking past national data and focusing on what’s local; the national market is not reflective of any given town

Broken down by region, July New Home Sales fared as follows:

  • Northeast Region : +100.0% from June 2011 
  • Midwest Region : +2.4% from June 2011 
  • South Region : -7.4% from June 2011 
  • West Region : -5.9% from June 2011 

However, as with most months, it’s important that we recognize the New Home Sales data’s margin of error.

Although New Home Sales showed a 1 percent drop in July, the reported margin of error was ±12.9%. This means that the actual reading could have been as high as +11.9 percent, or as low as -13.9 percent. Because the range includes both positive and negative values, the Census Bureau assigned its July data “zero confidence”.

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Rainmaker
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Elite Home Sales Team
A Tenacious and Skilled Real Estate Team
Keller Williams Realty

New home starts are at a 50 year low.  That is a significant problem in this market.

August 25, 2011 02:46 AM
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Rainmaker
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Tiffany Taylor

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