New-Home Sales Rise Marginally in August
September 29, 2009

Following four months of solid gains, sales of newly built, single-family homes edged up by less than one percent in August, according to data released by the U.S. Commerce Department recently. Sales posted a meager 0.7 percent gain to a seasonally adjusted, annual rate of 429,000 units for the month.

"One very positive aspect of today's report was the continued decline in the inventory of new homes for sale," says David Crowe, chief economist for the National Association of Home Builders. "The inventory declined for a 28th consecutive month in August, to 262,000 units, bringing us down to a 7-month supply at the current sales pace. That said, the fact that builders are not adding to their standing inventory indicates their concerns about what happens to buyer demand once the tax credit expires, and is also directly tied to the extreme lack of housing production credit that continues to weigh down the industry and stifle its potential as an engine of economic growth."

On a regional basis, new-home sales were somewhat mixed in August. A 12 percent gain in the West was entirely responsible for pushing the overall number upward, while the South posted no change from the previous month and the Northeast and Midwest each recorded declines, of 16.3 percent and 5.8 percent, respectively.

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