New home sales rebound 24%

home_sluggish_gi.top.jpg By Hibah Yousuf, staff reporter


NEW YORK (CNNMoney.com) -- New home sales rebounded in June from the record low hit the previous month but remained sluggish.

New home sales increased 23.6% to a seasonally adjusted annual rate of 330,000 last month, up from an downwardly revised 267,000 in May, the Commerce Department reported Monday. Sales year-over-year fell 16.7%.

The June sales pace is the second slowest ever on record since the Commerce Department began tracking the data in 1963.

But it was slightly better than the annual rate of 310,000 economists were expecting, according to a consensus survey by Briefing.com.

"While the increased rate was positive, it's a bit of a head fake based on the decline we had with May's lower revision," said Anika Khan, Wells Fargo economist. "And if we look at other indicators, like mortgage application volumes and builder sentiment, we can see that the housing market remains very weak.

Home sales had surged in March and April as homebuyers scrambled to sign contracts ahead of the April 30 deadline for the tax credit. But sales plummeted 40% in May, the first month after the incentive expired.

Khan said the end of the tax credit will likely trigger a couple more months of "payback," but then the housing recovery will pick up, though at a snail's pace.

"We're coming from extremely depressed levels, so it will probably be another two years before we get to a point where we see anything even vaguely close to a normalized rate," she said.

Khan added that the factors that will continue to stall the recovery are added tight lending practices, rising foreclosure and delinquency rates, and a sluggish labor market.

Price and inventory: The government report showed that the median price of new homes sold in June was $213,400, down 1.4% from May and a 0.6% drop from June 2009.

An estimated 210,000 new homes were for sale at the end of June, the lowest inventory level in nearly 42 years.

At the current sales pace, the government expects it will take 7.6 months to sell through that inventory, down from 9.6 months in May. Six months of inventory is considered normal market conditions.

Sales by region: Sales rose the most in the Northwest, where they surged by more than 46%; the South saw sales climb by about a third, while sales in the Midwest increased 21%.

Sales in the West, the only region to suffer a decline during the month, edged down almost 7%.  To top of page


Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.23%4.19%
15 yr fixed3.26%3.27%
5/1 ARM3.70%3.38%
30 yr refi4.22%4.18%
15 yr refi3.26%3.26%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,279.74 13.75 0.08%
Nasdaq 4,579.79 -13.64 -0.30%
S&P 500 2,010.40 -0.96 -0.05%
Treasuries 2.59 -0.04 -1.60%
Data as of 3:00am ET
Company Price Change % Change
Yahoo! Inc 40.93 -1.16 -2.74%
Microsoft Corp 47.52 0.84 1.80%
Bank of America Corp... 16.95 -0.09 -0.53%
Oracle Corp 39.80 -1.75 -4.21%
Facebook Inc 77.91 0.91 1.18%
Data as of Sep 19

Sections

Law enforcement officials say Frank Tamayo was the middleman in a $5.6 million insider trading scheme that involved him eating pieces of paper to cover up the crime. More

Scotland's clear rejection of independence has eased fears that it could suffer the kind of decline seen in Quebec after it failed to break away from Canada. More

It's really good to be Larry Ellison. The Oracle founder is stepping down as CEO, so maybe he'll have more time to enjoy his glamorous life. More

As Occupy Wall Street goes on its debt-abolishing tear, thousands of people across the country are begging them to forgive their loans. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.