Fueling fears that 2011 may be the worst year on record for new home sales, July new home sales fell for the third straight month with predictions for April, May and June being revised down. Recording an annual rate of nearly 300,000, sales declined 0.7 percent from June. Even though new home sales improved nearly 7% on a yearly basis, this particular number may be skewed by the expiration of the homebuyer tax credit in 2010.
It is estimated that new home sales will be at or around 319,000 yet the number may be decreased due to downward revisions. Last year, the estimated new home sales were at 321,000. It is shaping up to be the poorest year on record for new home sale since data started to be tracked in 1960.
Inventory of new homes for sale and available fell to record lows of 165,000 homes—just over a 6 month supply at the current rate as builders continued to retract on future projects. Low inventory will be an advantage when the market turns even though the recent amount of building permits pulled do not provide a lot of hope for a turn-around in the near future.
Falling 6% to $222,000, the median new home sales price continued to decrease. The average price for new homes gained 1 percent to $272,000. Homes offered between 200K-300K did the best in July by claiming 36% of the National market. Numbers decreased in the upper-end price ranges with homes offered between 400K-500K claiming only 4% of total sales. Who has money to buy a $500,000 home these days anyway?