New Home Sales Drop in Julyposted by MR WAVETHEORY at 8/24/2006 04:45:00 PM
The July level of 1.072 million units sold was down 21.6 percent from a year earlier and below the 1.100 million that had been expected by analysts.
The inventory of unsold new homes reached 568,000 at the end of July, up from 562,000 in June and an all-time high.
Will the housing market continue to drop?
I believe this is the question that everyone has in mind. I believe it is necessary to look beyond the headlines numbers. When prices reach record levels, it is only reasonable to expect many sellers to emerge. I believe new supply is being brought onto market by homeowners who may not have originally thought about selling their homes. Currently, we are in a period where the market is digesting this new supply of homes which previously were not available.
Will the housing market firm up?
In the same story, the author pointed out that unemployment claims actually slipped.
And the Labor Department reported Thursday that the number of Americans filing claims for unemployment benefits last week slipped by 1,000 to 313,000.
This can mean several things. 1) Job creation is still strong. 2) Unemployed workers have left the category of unemployed searching for jobs - and stopped looking. 3) The labor force is shrinking Homeowners are selling their houses and cashing out and retiring.
Prospective home buyers have turned cautious about making such a big-ticket purchase as mortgage rates have gone up and uncertainty has risen over whether the economy and job creation will keep slowing, analysts said.
Related Link: New Home Sales Drop 4.3 Percent in July