Posted on 09/27/2006 8:53:18 AM PDT by MooseMan
WASHINGTON (AP) -- Sales of new homes posted the biggest increase in five months in August, raising hopes that the steep slide in the housing industry may be leveling off.
Sales of new single-family homes increased by 4.1 percent last month to a seasonally adjusted annual rate of 1.05 million units, the Commerce Department reported Wednesday. It was the biggest increase since an 8 percent gain in March.
The August rise followed a 7.5 percent plunge in sales in July, which had registered the third straight decline.
The gain was far better than the 3 percent decline economists had been expecting and could signal that housing is beginning to level off after a steep slide. However, the price of homes sold in August fell to $237,000, down 1.3 percent from August 2005. It was the biggest year-over-year price decline in more than three years.
From 2001 through 2005, housing enjoyed five consecutive years of record sales, propelled by the lowest mortgage rates in more than four decades.
However, this year sales have been falling as mortgage rates rose and the economy slowed. The drop in sales and construction of new homes has been so sharp that some economists have worried that it could plunge the country into a recession.
But other analysts argue that recent declines in mortgage rates should help put a floor on the housing decline.
The increase in new home sales contrasted with earlier reports showing that sales of existing homes fell in August for a fifth straight month while construction of new homes and apartments dropped by a sharp 6 percent last month.
(Excerpt) Read more at biz.yahoo.com ...
Oh yeah, I forgot, BUSH'S FAULT
Which thread is correct...this one, or the one earlier that said sales are slumping?
New home sales are up because builders aren't as stubborn as re-sellers, who don't want to "just give away" their "homes". (In other words, they don't want to take less than the house is "worth" based on 2005 levels).
Builders are offering deep incentives and discounts. Much easier to buy new here in Northern VA.
"Oh yeah, I forgot, BUSH'S FAULT"
Must be a White House plot. First gas prices going down, now this. And just weeks 'til the elections. A smell a Rovian scheme here. LOL
>> However, this year sales have been falling as mortgage rates rose and the economy slowed. <<
Wow! We jumped from, "The housing market is cooling, which might make the economy slow," (which was a load of cr@p) to "The slowing of the economy has caused the housing market to cool."
BS
There is no slowing of the economy.
"A smell a Rovian scheme here. LOL"
It's the Bubb-O-Matic®. Rove needed a new toy. The WeatherTron™ is just sooo 2005.
Take your head out of the sand....economies run in cycles, and eventually slow down, like ours is right now.
Depends on your political affiliation.
So your evidence that the economy is slowing down is that economies always slow down?
Sounds relative.
What happen?
It was the first back-to-back decline in orders since early 2003. July's decline was revised lower to 2.7%.
Ominously, the report showed weak demand in almost every sector except defense and autos, which is undergoing a traumatic restructuring and is not likely to contribute much to growth in the medium-term.
The report turned an optimistic financial market around. Stock futures fell, the dollar weakened and bond prices rose.
Orders for core capital-goods equipment - business-investment goods -- fell 0.3% in August. Shipments of core capital goods rose 0.3% after a 1.6% gain in July, an indication that business investment could be weaker than expected in the third quarter after a surprising drop in the second quarter.
Continued strength in capital spending is considered to be essential to the expected soft landing in the U.S. economy.
Economists were expecting a small gain of around 0.5% in orders, according to a survey conducted by MarketWatch.
Durable-goods orders, while very volatile month-to-month, are considered a good leading indicator for manufacturing activity. The weak durable-goods report supports the surprising weakness in last week's Philadelphia Fed sentiment index. Other gauges of factory strength, however, have held up fairly well as the economy slows from a break-neck pace.
http://www.smartmoney.com/bn/ON/index.cfm?story=ON-20060927-000608-0900
----
"Everything is beautiful, in its own way . . ." [Sing along please]
Just one example of what is going on in Maryland: Despite the abandonment of several large condo projects by developers, there is still a huge glut of condos currently for sale - a massive 3 year supply of unsold condos:
Here are excerpts from today's Washington Post:
"The on-again, off-again effort to bring a luxury Canyon Ranch condominium community to North Bethesda is now officially off, making the high-profile development the region's latest victim of a slumbering condo market that has claimed dozens of projects."
"In the past six months, developers of 31 condo projects with a combined 5,700 units have abandoned their plans, according to Delta Associates."
"Condos are taking much longer to sell, as speculators have all but abandoned the market and buyers have become cautious."
"Despite the scrapped condo plans, there are nearly 24,800 new condo units on the market, up from 19,400 a year ago. Another 25,700 units are scheduled to enter the market in the next three years."
"At the current estimated sales rate of 8,000 to 8,500 units a year, the 24,800 unsold condos represent about a three-year supply."
Good point. Besides, the jump in new home sales isn't even for sure yet:
The government cautions that its housing data are subject to large sampling and other statistical errors. Large revisions are common.
The standard error is so high, in fact, that the government cannot be sure sales increased at all in August. The 4.1% increase is statistically meaningless.
It can take up to six months for a trend in sales to emerge. New-home sales have averaged 1.082 million per month over the past six months, up slightly from 1.080 million in the six-month period ending in July. The six-month sales average had fallen nine months in a row and is now down 16% from December.
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B4A9E1C6E%2D3542%2D41E0%2D9537%2DD116DAC97F8E%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo
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