RECOVERY MOMENTUM BUILDS IN US
August 27, 2009
The rate of newly built home sales increased 9.6% in July (to 433,000), according to figures from the Commerce Department, with a 32.4% rise in the Northeast, 16.2% in the South, 1% in the West and a decline of 7.6% in the Mid-west. The median sales price overall was down 11% in July to $210,000. This level was above estimates. A Bloomberg News survey, which compiled 71 projections, had estimates ranging from 365,000 to 420,000.
While this represents the third lowest level of sales for July since 1963, slowing construction means inventory levels are shrinking. The US Census Bureau confirmed that the estimated 271,000 new homes on the market represented 7.5 months of supply, down from 8.5 months in June and 12.4 months in January, with six months’ supply seen as an even balance between supply and demand.
It is thought that the stimulus created by an $8,000 tax credit for first-time buyers, benchmark interest rates at zero and increased availability of home loans from central bank purchases of mortgage-backed securities has resulted in more sales.
Source - OPP