New Home Sales Beat Expectations in July

Washington, DC, Aug. 26, 2009--Sales of new homes increased for the fourth month in a row in July, rising an estimated 9.6% to a seasonally adjusted annual rate of 433,000, the Commerce Department said.

The seasonally adjusted sales rate was the highest since last September. The fourth consecutive increase in sales adds to the growing body of evidence that the market is finally growing again after sinking to a record-low sales pace of 329,000 in January.

Government statisticians have low confidence in the monthly report, which is subject to large revisions.

The government says it can take up to five months to establish a new trend in sales. Over the past five months, sales have been on a 373,000 annual pace, up from 358,000 in the five months ending in June.

Sales in April, May and June were revised higher. Sales increased 9.1% in June to a revised 395,000 pace.

Sales in July were 13.4% lower than a year earlier.

Economists were expecting July sales to come in at around 395,000.

Inventories of unsold new homes fell 3.2% to 271,000, the lowest in 16 years. The inventory represented a 7.5-month supply at the July sales rate, the lowest in two years.

The number of homes under construction fell to 112,000, the lowest since the data were first collected in 1963.

It's taking a record 12.4 months to sell a home once it's completed.

The median sales price of a new home fell to $210,100, down 11.5% compared with a year earlier.