New home sales soar in June - Largest monthly increase in sales in nearly nine years

[jefferson_dem]

Source: AP

The Associated Press
updated 10:05 a.m. ET, Mon., July 27, 2009

WASHINGTON - New U.S. home sales rose by the largest amount in nearly nine years last month, in another sign the housing market is finally bouncing back from the worst downturn in decades, the government said on Monday.

The Commerce Department said sales rose 11 percent in June to a seasonally adjusted annual rate of 384,000, from an upwardly revised May rate of 346,000.

It was the strongest sales pace since November 2008 and exceeded the forecasts of economists surveyed by Thomson Reuters, who expected a pace of 360,000 units. The last time sales rose so dramatically was in December 2000.

Sales have risen for three straight months. The median sales price of $206,200, however, was down 12 percent from $234,300 a year earlier.

Read more: http://www.msnbc.msn.com/id/32170761/ns/business-real_estate?ocid=twitter

[redqueen]

1. I'd be interested to know how many homes were bought as investment properties

and how many were bought by people intending to live in them.

[snappyturtle]

2. Does this mean the banks are lending again?

Something stinks here. imho

[Igel]

11. Yes.

But not like before.

People criticized the banks for writing too many loans to people with poor credit histories, people unlikely to be able to pay off the loan, loans that were too big for the borrower, etc.

Then people criticized the banks for not writing loans to people with poor credit histories, to people unlikely to be able to pay off the loan, loans that are too big for the borrower, etc.

We just went through the process--we're part of that 11% uptick, to the extent that Houston's numbers are included (hint: They're not, the largest cities included in the indices are those with the largest bubbles). The banks wanted things done right: They wanted documentation, good (or at least decent) credit histories, assurance that the property was worth what was being borrowed, etc., etc. The mortgage broker said they'd really gotten picky; I figure it's a good thing, even if it means it's unlikely that borrowing rates will hit their former peak anytime in the next decade.

Like us, a lot of first-time buyers are in the market, buying up properties they'd never think to buy a few years ago when prices were high, and unsure when to jump on the escalator. This is a good thing, even if it means that most of our neighbors are almost certainly underwater. Then again, a few were foreclosed on in the last year, and they were counting on appreciation to allow them to refinance. The houses here did appreciate for a year or two, then fell in price. Now they're stuck either paying for a house worth $20k less than they paid, or renting for a while to rebuild their credit rating and starting over, paying the various upfront fees, etc. (Hint #2: They may be 'upside down', but the smart thing is to continue to pay--it'll be a couple of years before they can buy again, and with fees at $8k or so and various moving expenses, it's cheaper to stay.)

Some are being bought up by investment companies. Not a good thing, but it means that somebody will take care of the houses. At least a little.

[truedelphi]

14. It's always smart to buy when the market is low

And sell when the market is high.

Glad you were able to beenfit from the downturn. There has to be a silver lining for someone somewhere (Outside of course, of the inner circle of Wall St Banksters)

[snappyturtle]

20. I guess what irritates me so is that the banks who used less than

stellar lending practices that got us into this mess have been bailed out by the taxpayers and are now returning to stable lending procedures of yester year plus, we're cheering them on! Somebody needs to be residing in prison. What do you want to bet that some of the bankers are involved in the investment companies that are buying up some of the properties the bankers had so eagerly financed in the first place? imho

[4_TN_TITANS]

22. I agree with you, this smells....

this is totally contrary to the numbers of people losing jobs who can't even think about buying a house - much less one over $200,000 grand.

IF these numbers are true, they are indicative of the sharks in the water, hoping to share-crop the downtrodden in the future.

[northernlights]

3. it's the same lie as last month

Read past the headline and I'll bet sales declined year over year. Sales rose from May to June '09...not June '08 compared to June '09. That number likely dropped again.

Sales aren't counted until the sale closes. Think about it:

Sales in April actually started in January/February -- when nobody in the northern half of the country is looking at all, and families with children aren't looking either -- they're waiting for the school year to end.

Sales in May actually started in February/March -- same as above.

Sales in June actually started in March/April -- i.e. spring. That's the time you normally start looking. The weather is better and the school year will be ending soon. Combine that with the $8K tax break and people thinking the stimulus might work, and they start buying.

Sales will rise June, July and August, and then start to drop from September on.

[n2doc]

4. Also, it is easy to see big percentage gains from a small base

Since homes haven't been selling, it only takes a small increase to show up as a "big percent" gain. Raw numbers are the only thing that counts.

There sure is a concerted effort going on to make people believe it is all better now.

[Demobrat]

5. Yup it's just more spin.

Buried at the bottom: Sales of new homes were down 21 percent from June 2008.

[mbperrin]

17. How about 21% lower than last June?

Sales of new one-family houses in June 2009 were at a seasonally adjusted annual rate of 384,000, according to estimates
released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 11.0
percent (±13.2%)* above the revised May rate of 346,000, but is 21.3 percent (±11.4%) below the June 2008 estimate of
488,000.
http://www.census.gov/const/newressales.pdf

Figures don't lie, but liars figure!

[girl gone mad]

18. Correct. Sales declined 21.3% yoy.

The month to month data is statistically insignificant because the margin of error is +/-13.2%. Therefore, the claimed 11% increase in sales could actually have been a decline.

This kind of poor reporting has been a monthly occurrence. The fools in the MSM clearly didn't learn any lessons from completely missing the housing bubble, as they are still getting their facts wrong.

[denem]

6. U.S. New-Home Sales Climb 11%, Most in Eight Years

Source: Bloomberg

July 27 (Bloomberg) -- Purchases of new homes in the U.S. climbed 11 percent in June, the biggest gain in eight years, underscoring evidence that the deepest housing slump since the Great Depression is starting to stabilize.

Sales increased to a 384,000 annual pace, higher than any forecast of economists surveyed by Bloomberg News and the most since November, figures from the Commerce Department showed today in Washington. The number of houses on the market dropped to the lowest level in more than a decade.

Falling prices and a drop in mortgage rates have started to lure buyers even as the unemployment rate rises. Economists estimate that the worst U.S. recession in five decades is on the verge of ending as downturns in housing and manufacturing ease.

“We are making some progress in absorbing this huge inventory overhang” and that “is a fundamental step we need to take to begin to see home prices improve,” said Robert Dye, a senior economist at PNC Financial Services Group in Pittsburgh. At the same time, rising joblessness means “a rebound will be modest at best,” he added.

Read more: http://www.bloomberg.com/apps/news?pid=20601068&sid=aOdEKR9_Lz7s

---

Consistent with mortgage finance reports from the Banks.

[Demobrat]

7. July sales being up from June of the same year is typical. Happens every summer.

The telling line is this one, buried at the bottom: Sales of new homes were down 21 percent from June 2008.

[Robbien]

16. Historically most homes are sold in spring

So your comparison is the better one than the one MSM is pushing.

Yes, people move more in spring than any other season but MSM doesn't seem to have a memory if that memory goes against the story line it is gonna be pushing no matter what.

[Beavker]

8. Still not enough at this time to get our boys on Wall Street to Buy

Get rid of that inventory!

Market it down despite this. Pick and chose. Pick and chose. Some times the market is up on this kind of news (the major problem with our ecnomomy today getting better). They will ignore other things. Guess not today. Wonks.

[MineralMan]

9. A nice young couple looked at the empty, foreclosed house

next to ours yesterday. I went out and said hi to them in a very friendly way. We talked for a bit about the neighborhood, etc.

I sure hope someone buys the thing to live in rather than to rent out. They seemed genuinely interested. The realtor handling the sale did come in a couple of weeks ago and cleared the place, installed new carpeting and painted the entire interior.

Crossing my fingers.

[dipsydoodle]

10. The only problem is

that 1.11 x sweet fuck all, ain't a lot.

[Robb]

12. Bingo

Courtesy Dr. Housing Bubble:

[Hydra]

13. Sales are actually down in our area on both counts

But they'll trumpet any potential sign of recovery, even as employment dries up.

[girl gone mad]

15. Interesting spin.

Here's a quote which provides a bit of perspective (HT http://www.ritholtz.com/blog/">Barry Ritholtz):

“National New Home Sales, on a monthly basis, don’t even add up to half of the total foreclosure activity in California alone in a single month.”

-Mark M Hanson

[Imagevision]

19. i WONDER IF ANOTHER 1/2 MILLION WILL BE OUT OF JOBS FOR JULY?

[ProudDad]

21. If you're under water - like we are

Grab one of these intermittent spikes to unload...

The old "economy" is toast 'cause it was built on a bubbles built on the lie of capitalism's infinite growth paradigm.

The old "economy" is dead...

[Zorra]

23. Rich folks buying foreclosed homes so they can rent them out? nt

[and-justice-for-all]

24. Thats great fucking news...

but I can not refi my home to a lower interest rate because the lender tells me I live in a declining market..Seems you can not prevent the possibility of losing your home, you already have to be in the shit.