July 2013 New Home Sales miss expectations by 100K, lowest since Oct. 2012, only 3000 sold in Northeast. June 2013 revised down by over 40,000, median price continues down

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"Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue."

8/23/13, "New Home Sales Crater To Lowest Since October; Biggest Drop Since May 2010; Median Home Price At 6 Month Low," Zero Hedge

"And so the housing "recovery" comes to a screeching halt, which is not surprising as there never was a recovery to begin with.  Moments ago cheerleaders of the second housing bubble were shocked to learn that in July a tiny 35K new houses were sold (with just 3K sold in the Northeast, and just 19K in the otherwise strong South), of which 13K houses were not even started. This translated into a puny 394K seasonally adjusted annualized sales, missing expectations of 487K by nearly a massive 100K, and in addition the June print was revised much lower from 497K to 455K (which back in July beat expectations of 484K and was trumpeted as the highest print since 2008 - so much for that). Yet one thing that did not change is that the median home sale price decline continued, and in July dropped to $257.2K down from $258.5. And now time to spin this ugly news as great because it means that maybe the Fed will delay the September taper (it won't)....Finally, to all the clueless chatterboxes who say soaring mortgage rates don't matter, newsflash: they do."

Chart from Zero Hedge

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8/23/13, "New-home sales plunge as mortgage rates rise," AP via Toledo Blade

"Down 13.4 pct. in July to lowest level in 9 months."

"Americans cut back sharply in July on their purchases of new homes, a sign that higher mortgage rates may weigh on the housing recovery.

The Commerce Department said today that new-home sales dropped 13.4 percent to a seasonally adjusted annual rate of 394,000. That’s the lowest pace in nine months. And it is down from an annual rate of 455,000 in June, which was revised sharply lower from a previously reported rate of 497,000.

New-home sales have risen 7 percent in the 12 months ending in July. The annual pace remains well below the 700,000 that is consistent with a healthy market.

The housing market has been one of the strongest performers this year in an otherwise sluggish economy, helped by steady job gains and low mortgage rates. But mortgage rates have risen a full percentage point since May and have started to steal some of the market’s momentum.

In July, builders began work on the fewest single-family homes in eight months. And mortgage applications from potential buyers have fallen since rates have risen more than a full percentage point....

Though new homes represent only a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to data from the homebuilders association."...
  
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