New-Home Sales Slip, Beat Estimates (Update)

June sales totaled an annual rate of 530,000, down 33.2% from a year ago, but better than economists' targets.
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Updated from 10:22 a.m. EDT

June new-home sales came in higher than expected but remained at very depressed levels, signaling demand remains weak in the housing market.

Sales totaled an annual rate of 530,000, which was 0.6% below the revised May rate and 33.2% below a year earlier, the Census Bureau said Friday.

Economists expected 505,000, according to

Briefing.com

.

The raw inventory level fell once again to 426,000 units, down from 450,000 in May and 543,000 in June 2007. The June inventory number represents 10 months of supply at the current sales rate.

This was the largest monthly inventory decline since the data collection began in 1961, according to Wachovia. "While we are not ready to call a bottom this is certainly a positive sign," Wachovia economic analyst Adam York said in a research note.

Homebuilder stocks erased their early losses after the report came out. The

SPDR S&P Homebuilders ETF

(XHB) - Get Report

was trading up 3.3% at $17.46.

Pulte Homes

(PHM) - Get Report

surged 6.6% to $11.76,

Centex

(CTX)

rose 5.9% to $13.69, but

Ryland

(RYL)

was trading down 0.6% to $21.30.

On Thursday, the sector plunged after Pulte and Ryland reported large quarterly losses, and the National Association of Realtors said existing-home sales fell to the lowest rate in 10 years.