The stock market took yesterday’s report that new home sales rose to 330,000 units in June as a positive.
However, May sales, which were originally reported a month ago to have plunged a huge 32.7% to the worst level ever recorded since the record-keeping began in 1963, were revised downward to an even worse 36.7% decline, at only 267,000 units sold.
So the June sales were a 23.6% increase over that record low, which was the headline news.
But sales were only 6.1% above the consensus forecast of a bounce to 311,000 units after the big plunge in May, and at 330,000 June experienced the 2nd lowest monthly sales ever recorded.
The two month average of 298,500 homes sold was the lowest two-month level ever recorded.
Sales of new homes are at 47 year lows, down 80% from the number being sold in 2004, and a wave of foreclosed homes will be hitting the market over coming months, giving new home sales even more competition. Foreclosures on mortgages backed by Fannie Mae and Freddie Mac increased 21% in June from May.
A turnaround in housing? I don’t think so.
