New-home sales slide for 4th straight month

September 26, 2011: 11:11 AM ET
New home sales

Despite rock-bottom low interest rates and soft home prices, buyers are staying at bay: new home sales fall for the fourth straight month in August.

NEW YORK (CNNMoney) -- New-home sales fell once again in August, the fourth straight month of declining sales for the beleaguered home building market.

New homes sold at a seasonally adjusted annualized rate of 295,000 last month, a 2.3% drop from a revised rate of 302,000 homes sold in July, the Census Bureau said Monday.

That was better than the rate of 293,000 that economists were expecting, according to a consensus estimate from Briefing.com.

Even as sales were weak in August, they were still 6.1% above the same time last year, when new-home sales were at an annual rate of 278,000.

"The trend in recent months has been dead flat, with sales hovering around the 300,000 mark, down more than 80% from the boom-time peak," said Ian Shepherdson, chief economist at High Frequency Economics, in a research note.

Obama's housing scorecard

Shepherdson was actually "moderately relieved at this number," given that Hurricane Irene hit during the month, and consumers watched rating agency Standard & Poor's downgrade the credit rating of the United States following a Congressional stalemate over the debt ceiling.

"Still, the market is dead, and even record low mortgage rates are not doing anything to help," said Shepherdson.

Interest rates are at rock-bottom lows. Mortgage rates are tied to the yields of Treasury notes, and investors anxious about the European debt crisis have been pouring into the safe haven of government debt.

Also, in the wake of the housing bust, home prices continue to remain soft.

The median sale price of new homes sold last month was $209,100, down 8.7% from the previous month when the median price was $228,900. And the average sale price was $246,000, down 8.7% from July's average of $269,500.

For prospective buyers, there were 162,000 homes available at the end of August, the government reported. At current sluggish sales rates, that represented a 6.6 month supply.

I bought my dream retirement home -- cheap!

Builders are building fewer homes these days in the face of tepid sales. "Builders have responded by cutting new construction to a record low, so the months' supply number is a healthy-looking 6.6," said Shepherdson. To top of page


Overnight Avg Rate Latest Change Last Week
30 yr fixed4.28%4.30%
15 yr fixed3.24%3.18%
5/1 ARM3.41%3.53%
30 yr refi4.19%4.22%
15 yr refi3.18%3.12%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Find Homes for sale
  • Property Type
  • Find a home in:
    New York | Atlanta | Chicago | Los Angeles
    Washington D.C | Houston | Philadelphia | More options
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.