This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

New-Home Sales Fall 12.4% in July

(New-home sales article updated with additional commentary and stock-price movement.)

NEW YORK ( TheStreet) -- Sales of newly built homes fell 12.4% in July to a seasonally adjusted all-time low rate of 276,000, the Commerce Department said Wednesday. The figure came in well below expectations for a rate of 334,000 after a revised rate of 315,000 in June, and added to the already dismal outlook for the U.S. housing market following Tuesday's weak existing-home sales data .

July's rate represented a 32.4% decline from year-earlier results, and the weakest month on record. Sales were strongest in the South and weakest in the Northeast.
New Homes

The median sales price for new houses sold in July was $204,000, the report said, while the average selling price was $235,300. There were 210,000 new houses on the market at the end of July. It would take 9.1 months to work through that inventory at the current sales pace.

Stocks in the homebuilder sector seemed to have already priced in the dismal data, especially in light of Tuesday's weaker-than-expected report on new-home sales. The SPDR S&P Homebuilders (XHB), an exchange-traded fund that tracks the homebuilder sector, closed up 3.2%. The iShares Dow Jones US Home Construction (ITB) gained 3.1%. NVR (NVR - Get Report) rose 1.8%, PulteGroup (PHM - Get Report) 3.1%, Ryland (RYL - Get Report) 3.6% and M.D.C. Holdings (MDC - Get Report) 4.4%.

Shares of Toll Brothers jumped 5.8%. The luxury homebuilder said early Wednesday it returned to profitability for the first time since 2007.

Wednesday's new-home sales data came a day after the National Association of Realtors said existing-home sales plummeted 27.2% in July to a seasonally adjusted annual rate of 3.83 million units. The figure was far worse than the expected rate of 4.72 million units after a downwardly revised rate of 5.26 million in June.

The data sparked a heated debate among readers of TheStreet. Join the discussion here.

>>Existing-Home Sales: Winners & Losers

Even record-low and near-record-low mortgage rates have failed to spark demand for housing in recent months. The average rate on a 30-year fixed mortgages fell to 4.55% in the week ended Aug. 20, the Mortgage Bankers Association said Wednesday. It was the lowest rate since 1990, falling from 4.6% in the prior week.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
ITB $27.56 0.00%
LEN $51.20 0.00%
MDC $29.97 0.00%
NVR $1,362.99 0.00%
PHM $20.55 0.00%

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs