July New Home Sales Are Down

The number of people who bought new homes fell in July, the fourth drop in as many months. Sales this year are on track to finish as the worst on records dating back more than half a century.

house sitting in the shadowsThe 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.

Bio photo of Andrew Schneider

Andrew Schneider

Business Reporter

Andrew Schneider joined KUHF in January 2011, after more than a decade as a print reporter for The Kiplinger Letter...