More New Homes Sold, But Purchase Volume Slips
There was a happy shot of good news in the latest federal housing data: Sales of new single-family houses in July were at a seasonally adjusted annual rate of 654,000, according to estimates released by the U.S. Census Bureau and the Department of Housing & Urban Development (HUD). This volume is 12.4 percent above the revised June rate of 582,000 and is 31.3 percent above the July 2015 estimate of 498,000—and it is also nearly a nine-year high for new home sales activity.
The median sales price of new houses sold last month was $294,600, while the average sales price was $355,800. The seasonally adjusted estimate of new houses for sale at the end of July was 233,000, which represents a supply of 4.3 months at the current sales rate.
Jonathan Smoke, chief economist at Realtor.com, cheered the data as a sign of a strengthening housing market. “New home sales are finally surging, rising to the highest level since 2007 and it’s great to see evidence of much-needed growth and a shift toward more affordable prices in July’s report,” Smoke said. “New homes are the escape valve for limited supply like we’ve been seeing, and with sales of new homes up 13 percent over the first seven months of 2015, we’re definitely going in the right direction.”
But while more new homes were selling in July, purchases represented only 62 percent of all closed loans during the month, down three percent from June’s high of 65 percent. According to data from Ellie Mae, refinances increased to 37 percent of all closed loans in July, up from 34 percent one month earlier.
“Average FICO scores were also on the rise, climbing back to 727, which is the highest average we’ve seen since June of 2015,” said Jonathan Corr, president and CEO of Ellie Mae, who also noted that the average time to close all loans remained steady at 46 days in July while closing rates for all loans increased to 71.6 percent in July, up from 69.6 percent in June.
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