Bad News from the Housing Sector Continues…..
Andover, Massachusetts August 25th, 2010 – Recent data released continues to paint a grim picture for the housing sector since the federal housing credit ended a couple of months ago. New home sales hit the lowest level ever in July and existing home sales took another tumble in July as well. All of this news is dragging on the stock market and continues to further the idea that a double dip recession is coming. While I disagree, the data is not encouraging and indicates that the housing sector still has not hit rock bottom.
New home sales dropped 12.4% in July from the previous month to an annual rate of 276,600. This is the lowest annual rate ever recorded since record keeping was first started in 1963. Not only does this mean the housing market still has some room to drop but it also means the construction industry will continue to be hard hit. As winter approaches and these numbers remain low the next 6-9 months could be particularly tough for construction workers. If this wasn’t bad enough, on Monday the NAR (National Association of Realtors) reported that July sales of existing home fell to a 15 year low. While these sales do not affect a particular industry besides realtors it is a much bigger slice of the pie and indicates demand continues to sink. While people may want to move for better work opportunities or family reasons many can not do so at the time because their current homes are underwater. Until housing prices improve the rate of home sales will continue to stay below normal.
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