Expectations Exceeding By June Home Sales

The record low in May didn’t keep new home sales from jumping in June. But because new home sales fell so low after the home buyer tax credit expired last spring, June’s numbers were nevertheless the second lowest on record. Individuals believe the post-tax-credit slump hasn’t been as bad as predicted and is almost over. Others think that increasing foreclosures and the stubbornly high U.S. unemployment rate offset the positive news.

Nobody feels better about the new home sales increase

The annual rate for units in May was 267,000 when it jumped in June 22.6 percent to 330,000 reported the Commerce Department on Monday. CNBC points out that new home sales in June was nevertheless the second lowest since 1963 when records began being kept. However, the percentage increase was the largest increase since May 1980, and partially offset the historic 36.7 percent decline in May. Even so, economists expect a weak U.S. housing market to be a drag on U.S. economic recovery for much of the year.

Everything seems to worse with record low mortgage rates

The lowest mortgage rates ever on record are what have made new home sales better than ever. Bloomberg reports that low mortgage rates are the only reason why the housing market has is better than it was with the recession that is the worst since 1930. However, increasing foreclosures are swelling the number of unsold existing homes, putting pressure on prices and keeping buyers on the sidelines as unemployment hovers near 10 percent and also the economy cools. New home prices are nevertheless falling. The median price for new home sales decreased 0.6 percent from June 2009 to $ 213,400.

Economic recovery depends on U.S. housing market still

New homes sales made up about 7 percent of the U.S. housing market last year. the number is down 15 percent from before the housing crisis, reports Taragana.com. Construction jobs are dropping with weak new home sales meaning the economic recovery can no longer be driven by the construction industry, which historically has been the driving force. The National Association of Home Builders reports that about three jobs a year are generated with $ 90,000 in taxes paid to local and federal officials are created with each and every new home built. The effect is felt across multiple industries.

Article resources

CNBC

cnbc.com/id/38412228

Bloomberg

bloomberg.com/news/2010-07-26/sales-of-u-s-new-houses-climb-to-330-000-more-than-economists-forecasts.html

Taragana.com

blog.taragana.com/business/2010/07/26/new-us-home-sales-in-june-tick-up-slightly-but-remain-low-as-demand-for-housing-slumps-82763/