New home sales increased 9.6% to an annualized rate of 433,000 units in July. For the second consecutive month, new home sales exceeded consensus expectations by over 30,000.
The new home sales increase comes on the heels of multiple positive reports in the housing market, signaling that the bottoming of the housing market may be near. For the second consecutive month, the Case-Shiller housing price index reported positive month-over-month pricing gains. Existing home sales have risen for four consecutive months, the first time this event has occurred in five years.
Median new home sales prices fell 0.1% to $210,100 and are still down 11.6% since July 2008.
However, unlike existing homes, which were heavily influenced by the tax break for first time home buyers, new home sales have maintained their sales price distribution through most of 2009. If sales follow their current trend, steep price declines are at an end.
By region, new home sales were up 32.4% in the Northeast; down 7.6% in the Midwest; up 16.2% in the South; and up 1.0% in the West.
At the current rate of sales, inventories of new homes fell 11.8% to 7.5 months.