New home sales creep off record lows

NEW YORK (CNNMoney.com) -- New home sales remain near record lows, coming in unchanged in August.

Sales of new homes were flat in August at a seasonally adjusted annual rate of 288,000, the second lowest level since the Commerce Department started tracking new home sales in 1963.

Last month, the Commerce Department had reported that sales plunged to a record low of 276,000, but this month it revised that number to 288,000.

Sales year-over-year are down 28.9%.

Home sales were expected to jump to an annual rate of 291,000 in August, according to a consensus estimate of economists surveyed by Briefing.com.

"It would have been nice to finally see a nice upward blip, but this is not surprising at all," said Leif Thomsen, CEO of Mortgage Master. "Builders are unable to get financing for new homes in this economy, and buyers aren't in a hurry to buy because they know nothing is really selling."

Reports earlier this week onexisting home sales and new home construction indicated slightly improving housing market conditions. But until hiring picks up and more people start shopping for houses, a significant rebound is unlikely.

"If people don't have jobs they obviously aren't going out and buying homes," said Thomsen. "If unemployment doesn't get worse, we can expect a very slow, but upward move from here."

Price and inventory: The government report showed that the median price of new homes sold in July was $204,700, a 0.5% decline from July and down more than 1% from August 2009.

"This is a very, very small step in the right direction but shows that prices are starting to stabilize," said Thomsen, warning that it is likely to take years for prices to fully stabilize.

At the end of August, 206,000 new homes were for sale. At the current sales pace, the government expects the supply to last 8.6 months.

"If you have a stable market, you're looking at inventory of six to seven months," said Thomsen. "Since builders are afraid of building in this environment and can't get the financing to build, the [current] supply might not change much in the near future."

Sales by region: Sales soared in the West, rising 54.3% in August. The Northeast saw sales rise by 16.7%. Sales in the Midwest fell the most, by 26.1%, while sales in the South fell 10.8%.