Builders have plenty of homes to offer buyers — as well as sales incentives not available to the typical homeowner — but those advantages haven’t appeared to spur transactions.
Sales of newly built single-family homes were down 0.6% in July compared to June and down 8.2% from a year earlier, according to the U.S. Census Bureau. The seasonally adjusted annual sales rate for new homes has now dropped to 652,000.
A slow summer for new home sales: While last week’s existing-home sales report — which found that the pace of existing-home sales surpassed 4 million in July — showed some signs of improvement for the market as a whole, it appears to be coming at the expense of new home sales. In a break from historical trends, new homes are selling for less than existing homes, noted Lisa Sturtevant, chief economist at Bright MLS.
“Despite more inventory to choose from and price advantages, new home sales continue to lag,” Sturtevant said.
Incentives aren’t doing the job: Two-thirds of builders reported offering sales incentives in August — up from 62% in July, according to the National Association of Home Builders’ (NAHB) monthly index. But broader market and economic forces may be holding buyers back, noted First American Deputy Chief Economist Odeta Kushi.
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Author: Dave Gallagher
