Substantially recovering from record lows in May, new house sales surged in June, taking the inventory of houses available on the market to a 42-year low.
June numbers were contrasted by downward revisions to sales estimates of April & May, solidfying perceptions of second quarter growth and substantiating apprehensions of a weak housing market.
The increase in new home sales in June was the largest seen since May 1980, and rivaled that year's 36.7% drop caused by a popular tax credit that improved sales.
The impressive surge in June in sales resulted in the supply of new propertys available on the market plummet from 9.6 months' worth to 7.6 months' worth. Reaching their lowest levels since 1968, the number of new homes available on the market fell 1.4% to 210,000 properties.
Despite June's undoubtedly positive growth, analysts cautioned that an importunate high unemployment rate may stall a return to a healthy housing market.
New property sales are only a small amount of the US real estate market. Analysts polled last month predict nearly a 7 percent increase in new property sales, predicting sales of 320,000 homes in June, up from May numbers of 300,000 houses.
During the same time new properties sales recovered, existing property sales hit 3 month lows. The housing report came on the heels of an announcement by FedEx Corp. that they had upgraded their quarterly and annual earnings predictions, together beginning a rally on Wall Street. FedEx also stated that air & ground deliveries were up, indicating positive economic growth.
Manufacturing, considered a principal component of growth, continued its decline into July. A poor housing market is expected to hamper growth through most of the remainder of the year, but the housing sector is not expected to initiate a renewed downturn.
While the news and media ordinarily can make it seem as if there is a national housing market, the truth is that homebuyers do not shop nationally when locating a home. Similarly, the job market, the local economy and multiple other things should typically be quite different between different localities. As such, assessing the health of a local real estate market can't be determined by examining national information. Additionally, because local economies vary widely, the chance of locals wanting to buy a property will also be quite different.
