July New Home Sales Are Down
by: Andrew Schneider, August 25, 2011 1:08:00 am
The Commerce Department says sales of new homes fell nearly 1% in July to a seasonally adjusted rate of 298,000. That’s less than half the 700,000 most economists say represent a healthy market.
Ralph Bivins covers real estate trends for the Texas-based Realty News Report.
“What’s amazing is that this is being done in the face of very low interest rates. You can get a fifteen year [mortgage] for 3½ %. We haven’t seen mortgage rates like that in quite some time. Despite that, buyers are still not willing to take a chance.”
Bivins says the situation in Houston is slightly better, due to solid hiring in the energy sector.
“You have seen some new construction happening, a few new subdivisions, but not many.”
New homes represent less than one-fifth of the housing market but have an outsize impact on the economy. Each home built creates an average of three jobs and $90,000 in taxes, according to the National Association of Home Builders.