New home sales drop to record lows in July

Sales of newly built, single-family homes declined 12.4 percent to a seasonally adjusted annual rate of 276,000 units in July, according to data released by the U.S. Commerce Department. This was the lowest sales rate for new homes on record. "Today's report, though not unexpected, is disappointing in view of the improvement in sales activity that we saw in June," said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. "Potential homebuyers have become very hesitant due to uncertainty about the economy and job market, and are putting off the decision to buy until they feel more confident." "The slow pace of economic recovery and worries about job security are weighing heavily on the minds of potential home buyers right now," said NAHB Chief Economist David Crowe. "As a result, the housing market is clearly in a holding pattern. That said, NAHB does not project that a double-dip recession is in the cards, and we are looking for employment gains later this year to help bolster sales activity moving forward." Sales of new homes fell across every region in July, with a 13.9 percent decline registered in the Northeast, an 8.3 percent decline in the Midwest, an 8.7 percent decline in the South and a 25.4 percent decline in the West. Meanwhile, the latest figures indicated that builders are keeping a tight rein on the inventory of new homes for sale. That inventory remained unchanged at 210,000 units in July. However, due to the slower pace of sales activity, the month's supply of homes rose to 9.1 from 8.0 in the previous month. For more information, visit www.nahb.com.