New Home Sales Remain Flat while Remodeling SlowsAugust 2nd, 2011 by DWM Magazine
Sales of newly built, single-family homes declined 1 percent to a seasonally adjusted annual rate of 312,000 units in June, according to figures released last week by the U.S. Commerce Department.
“June’s sales numbers illustrate how the fledgling housing and economic recovery go hand-in-hand,” said NAHB senior economist Robert Denk. “Improving confidence in the broader economic recovery — in particular, solid job growth — will bring buyers back into the housing market.
Regionally, new-home sales were mixed in June. Sales declined 15.8 percent in the Northeast and 12.7 percent in the West and posted gains of 9.5 percent in the Midwest and 3.4 percent in the South from the previous month.
Meanwhile, the inventory of new homes for sale continued a downward trend in June, falling 1 percent to 164,000 units. This marks the lowest inventory number on record and represents a 6.3-month supply at the current sales pace.
Remodeling Slows as Well
Similarly, the remodeling market slipped under pressure from a sluggish economy according to the NAHB Remodeling Market Index (RMI), which dipped during the second quarter to 43.9 from the first-quarter result of 46.5. The overall RMI combines ratings of current remodeling activity with indicators of future activity, such as calls for bids. Current market conditions for the second quarter of 2011 fell to 44.8 from 46.1 in the first quarter. Future market indications dropped to 43.0 from 46.8 in the previous quarter.
Regionally, current market conditions shrank in two areas: the Midwest to 44.4 (from 47.1 in the first quarter) and the South to 42.9 (from 46.1). The West at 48.2 (from 46.1) and Northeast at 48.1 (from 46.1) both climbed modestly.
Two indicators of current market conditions dropped: major additions to 46.2 (from 50.3 in the first quarter) and maintenance and repair to 38.4 (from 39.5). A third indicator, minor additions, remained essentially flat at 48.5 (from 48.0). Future market indicators also descended: calls for bids to 49.8 (from 53.1), backlog of remodeling jobs to 45.7 (from 49.7), and appointments for proposals to 44.2 (from 52.4). The amount of work committed for the next three months stayed level at 32.3 (from 32.1).