Home Sales: New & Existing
Chart of the Week for June 27, 2008 - July 2, 2008
Two good measures of housing market health are existing and new homes sales. New homes sales are published monthly by the U.S. Census Bureau and represent a national sampling of new building activity. Existing home sales are published monthly by the National Association of Realtors and represent existing single-family home sales. The chart above compares the number of new and existing home sales since 2002. Existing home sales increased slightly last month as a market surplus of homes have driven down prices. The elevated home foreclosure rate has also contributed to an increase of lower priced existing homes, which is helping bring buyers back into the market. As an example of this trend, about half the existing home sales for the month of May in California were reportedly foreclosure sales. The drop in home sales has been significant over the last year as existing home sales have dropped over 10% and new home sales by 40%. The larger drop in new home sales may be attributed to increased inventories and buyer aversion to the downward home price movement. While both home sale groups have struggled since 2006, recent existing home sales appear to have stabilized in the near term.
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