Despite a 12.3 percent downward revision to the estimated number of new U.S. homes sold in May, the largest downward revision on record, the seasonally adjusted annual pace of new single-family home sales in the U.S. fell to 406,000 in June, down 8.1 percent from May’s revised pace of 442,000 and 11.5 percent lower versus the pace as measured in June of 2013.
At the same time, the inventory of new single-family homes for sale in the U.S. is 23.1 percent higher on a year-over-year basis and the greatest number of new homes are on the market (197,000) since 2010.
The pace of new single-family home sales as measured in June has averaged 653,000 over the past 50 years and peaked at 1,274,000 in 2005.
Comments from Plugged-In Readers
Well well well…..let’s hear three cheers for the President Obama economic recovery policy…….drum roll please
(see name link)
Don’t know how much blame (or praise) a sitting president should get for things like this.
But I do think this should be seen as a side effect of a policy intended to prop up home (and other asset prices). Keeping prices at a higher level then many can afford is bound to reduce sales. I still expect the industry to eventually react to this by moving to a lower price point.
Well, a few things here:
Obama didn’t (and still, doesn’t) have all powers to put a Keynesian-type recovery into place. Debt-obsessed Repubs will not have him spend on large forward-thinking infrastructure projects. We need HSR. We need renewable energy. We need to maintain what we have today and that has started crumbling.
But since he couldn’t, the only way to throw some cash into the economy was RE debt purchase, keeping interest rates pretty low through 85B/month purchases.
What this has done is help jump-start a very tepid recovery. In theory people should be buying up property like they’re in 2005, but since lending standards are still pretty strict and paychecks are stuck due to a lack of strong pick-up in the real economy, there’s not much that Real Estate can do more to help the economy. If we allowed the average Joe to borrow 120% of property value, we would see RE cash getting into the real economy. But we all know what happens next. Too many houses, not enough other investments, too much debt.
2003-2006 was about wagging the dog, and we wagged it alright, until the tail fell off. We can’t have it another time, since we haven’t paid the bank’s debts they nicely left us.
Now the Mid-term elections will tell us if Obama will have more power to really restart the economy the right way. I hope he manages to overcome the incumbent fatigue that will compound the lower economical numbers.
Something that is not going to help home affordability in SF. Google might have purchased Twitch for a cool Billion. More startup monetization if this turns out to be true.
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