New Home Sales Up; Existing Home Sales Down

Sales of newly constructed single-family homes rose for the fifth month in a row in August, according to figures released today by the U.S. Census Bureau and Department of Housing and Urban Development (HUD).

New home sales were up 0.7 percent for the month on a seasonally adjusted basis, to an annual rate of 459,000 units. Although the August increase itself is statistically insignificant, the fact that new home sales have risen for five consecutive months is considered a reliable indicator that the housing market is rebounding.

The pace of sales remains below that of last year, trailing the August 2008 annual rate of 444,000 units by 3.4 percent. The median sales price of new homes sold in August was $195,200, with half of all home selling below that price and half selling above. The average sales price was $256,800.

Existing home sales down

The report comes a day after the National Association of Realtors reported that its own survey showed that sales of existing homes of all types declined 2.7 percent in August, following strong gains in July. That survey reported a seasonally adjusted sales rate of 5.10 million units in August, down from 5.27 million in July. In contrast to the new home sales rate, sales of existing homes were up 3.4 percent from the previous year, when an annual rate of 4.93 million units was reported in August 2008.

Sales of existing single-family homes were down 2.8 percent in August, to a seasonally adjusted rate of 4.48 million, but up 2.5 percent from the August 2008 level. Sales of existing condominiums and co-ops were down 1.6 percent in August, to a seasonally adjusted rate of 620,000 units, but were up 10.1 percent from one year earlier.

The median sales price of existing single-family homes was $177,500, down 12.1 percent from August 2008, while the median sales price for existing condominiums and co-ops was $179,300, down 15.7 percent from the year before.

Foreclosures nearly one-third of sales

The NAR said prices on existing homes are being depressed by the large supply of foreclosed properties on the market, which made up 31 percent of all existing home sales in August, unchanged from July. The NAR calculates that foreclosed properties typically sell for about 15-20 percent less than nondistressed homes.

First-time homeowners, spurred by an $8,000 tax credit, made up 30 percent of all buyers of existing homes, the same as in July, the NAR reported.