New Home Sales Heating Up…For Now

Sales of new single family houses in July 2009 were at a seasonally adjusted annual rate of 433,000 .  This is 9.6 percent (±13.4%) above the revised June rate of 395,000, but is 13.4 percent (±12.9%) below the July 2008 estimate of 500,000.

What remains to be seen is what impact the First Time Home Buyer tax credit programs have on the burst of activity in new home sales.  If  home sales follow the drop off experienced in Auto sales after the expiration of the Cash for Clunkers program, then we will see these numbers soften in the coming months.  Of course, if the govt. passes a new home buyer tax credit program we may see some sustained heat in new home sales.  In my home town of Folsom it is encouraging to see some new construction going on – a welcome sight after a few years of stalled projects!