WASHINGTON, D.C. - In yet another sign that the global recession may soon be coming to an end, purchases of new homes in the US rose 11 per cent in the month of June. Sales reached an annual pace of 384,000 units in June, handily beating industry estimates and growing at the fastest pace in eight years in the process. The sales pace is now at the highest level it’s been since November of last year.
The available stock of homes, meanwhile, declined to the lowest level it’s seen in the last decade - which should put positive pressure on starts. Earlier this month, the Commerce Department announced that starts in June had reached an annual pace of 582,000 units, or roughly the levels of last November. These latest sales figures suggest the growth in starts should continue in the near term.
These are also positive signals for the economy as a whole, as housing is widely recognized as a leading indicator for the health of the broader economy.
Low prices, interest rates and government incentives are being credited with spurring sales. The median price of new home sales declined 12 per cent to $206,200, versus $234,300 in June 2008. Prices were down 5.8 per cent from May 2009.
National standing inventory now stands at 8.8 months, the lowest level it’s been at since October 2007.