South Bay Homes and Real Estate

New Home Sales Stage Impressive Rebound in June

Dramatically recovering from May’s record lows, new home sales surged in June, bringing the inventory of homes on the market to a 42-year low.

June figures were contrasted by downward revisions to April and May sales estimates, tempering perceptions of second quarter economic growth and substantiating concerns of a persistent weak housing market.

The percentage increase in new home sales in June was the largest seen since May 1980, and rivaled that year’s memorable 36.7 percent drop spurred as by a wildly popular tax credit that bolstered sales.

June’s impressive surge in sales saw the supply of new homes on the market plummet from 9.6 months’ worth in May to 7.6 months’ worth. Reaching their lowest levels since the third quarter of 1968, the number of new homes on the market fell 1.4 percent to 210,000 homes.

Despite June’s undoubtedly positive growth, analysts cautioned that an importunate high jobless rate threatens to stall a return to a healthy housing market.

Rancho Palos Verdes Real Estate Market Report

While a certain bellwether, new home sales make up only a fraction to the total U.S. housing market. Analysts polled last month forecasted nearly a 7 percent uptick in new home sales, predicting sales of 320,000 homes in June up from May numbers of 300,000 homes.

At the same time that new homes sales rebounded, sales of existing homes hit three month lows.
The housing report came on the heels of an announcement by FedEx Corp. that the logistics and package delivery giant had upgraded its quarterly and annual earnings forecasts, together sparking a rally on Wall Street. FedEx also said that air and ground package deliveries were up, signaling positive overall economic growth.

All three major U.S. stocked indexes staged a 1 percent rally, each gaining 1 percent on the day. The Nasdaq, already narrowly in positive territory for the year, closed at 1.2 percent up for the year. The Standard & Poor’s 500 closed just shy of breaking even for the year, while the Dow Jones industrial average has also regained positive ground.
While all signs signal a relative lull in the U.S. economy’s recovery from the most extended and far reaching recession since the 1930s, economists do not anticipate a double-dip recession.

Numbers set to be released this week are expected to show a slow in gross domestic product growth, with a growth rate 2.5 percent in the second quarter of this year, down from a growth rate of 2.7 percent in the year’s first quarter.

Manufacturing, regarded as a principal engine of growth, continued its decline into July. A weak housing market is expected to continue to hamper growth through much of the remainder of the year, but the housing sector is not expected to trigger a renewed downturn.

About the Author:
Eric Bramlett is the broker & co-owner of One Source Realty, a boutique Austin real estate brokerage. Eric currently manages his agents, and works with select buyers & sellers. Eric manages a Austin condo website, and specializes in Steiner Ranch Homes for Sale. Eric has worked in central & west Austin for 7+ years, and is considered an expert in online marketing.