2011 worst year for new home sales on record, November home sales indicator of growth?, Existing home sales revised downward, Accurate reporting?
I was listening to the “news” on Friday and heard that the financial markets had reacted to a report that new home sales were up in November.
From Business Week December 23, 2011.
“U.S. Stocks Rise as Durable Goods, Home Sales Signal Expansion”
“U.S. stocks rose, pushing the Standard & Poor’s 500 Index to a 0.6 percent yearly rally, as expansion in U.S. industrial purchases and stronger new-home sales offset weaker-than-forecast consumer spending.”
New home sales reality check.
From MSN Business news December 26, 2011.
“Worst year for new home sales in US”
“Americans probably bought more homes in November, but 2011 likely will end up as the worst year for new-home sales since the government began keeping records in 1963.
Sales last month are expected to rise to a seasonally adjusted annual pace of 312,000, according to a survey of economists by FactSet. That’s less than half the 700,000 that economists say must be sold to sustain a healthy housing market.
The Commerce Department will release the report on Friday morning.
In October, new-home sales rose 1.3 per cent to a seasonally adjusted annual rate of 307,000. But the median price fell to its lowest level of the year: $US212,300 ($A210,200).
The year’s sales pace is trailing last year’s total of 323,000 new homes sold, the fewest on record.
Economists say housing is a long way from fully recovering. Builders have stopped working on many projects because it’s been hard for them to get financing or to compete with cheaper resale homes. For many Americans, buying a home remains too big a risk more than four years after the housing bubble burst.
Even so, home construction has begun a gradual comeback and should add to economic growth in 2011. The main reason is that the rate of apartment construction is nearly twice as fast as it was two years ago.
And rising interest from would-be buyers left US homebuilders less pessimistic about the housing market in December, according to the National Association of Home Builders/Wells Fargo builder sentiment index. It rose two points this month, reaching its highest level since May 2010.
Though new-home sales represent less than 10 per cent of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $US90,000 in tax revenue, according to the National Association of Home Builders.
Home prices have tumbled, the job market remains weak and unemployment is still high at 8.6 per cent. Some people who want to buy can’t qualify for a loan or make the higher downpayments that banks are demanding.”
Existing homes sales were recently revised downward.
From Citizen Wells December 14, 2011.
“Five years of home sales to be revised lower in ‘meaningful’ way”
“If you thought the U.S. housing market couldn’t get much worse, think again.
Far fewer homes have been sold over the past five years than previously estimated, the National Association of Realtors said Tuesday.
NAR said it plans to downwardly revise sales of previously-owned homes going back to 2007 during the release of its next existing home sales report on Dec. 21.”