New-Home Sales Plummet, 4th Straight Month

New-Home Sales Plummet, 4th Straight Month

Daily Real Estate News | Tuesday, September 27, 2011

New-home sales dipped 2.3 percent in August, marking its fourth straight month of declines, the Census Bureau reported Monday.

New-home sales are on track to reach its lowest level on record this year. If new-home sales follow at the current pace, sales this year could be about 302,000 units, lower than last year’s 321,000 units record low. At its peak in 2005, new-home sales topped nearly 1.3 million units.

Meanwhile, builders are bringing new-home construction practically to a halt in many parts of the country with only 162,000 housing units for sale nationwide—another record low, according to the Census Bureau. The Commerce Department reported last week that fewer homes were under construction in August than at any previous time on record, dating back to 1970.

“When the housing market turns, an inventory swing will give housing starts an extra boost, just as inventory swings boost output in other industries,” Patrick Newport, economist for IHS Global Insight, told MSNBC.com.

New-homes continue to battle competition from ultra-low prices of foreclosures that have flooded many markets. Builders have been forced to lower their prices too. The median sale price of a new home in August was $209,100, which is down nearly 9 percent from July’s $228,900 median price.

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