Economic Report: Forget slump in new-home sales in July. Falling mortgage rates are reviving housing market

Sales of new homes are trending higher as mortgage rates tumble to the lowest level in years. The numbers: Sales of new U.S. homes have zig-zagged up and down for months, but they appear to be creeping higher again overall with mortgage rates falling to multiyear lows. The government on Friday said new-home sales fell…

Economic Report: Forget slump in new-home sales in July. Falling mortgage rates are reviving housing market

Sales of new homes are trending higher as mortgage rates tumble to the lowest level in years. The numbers: Sales of new U.S. homes have zig-zagged up and down for months, but they appear to be creeping higher again overall with mortgage rates falling to multiyear lows. The government on Friday said new-home sales fell almost 13% in July to an annual rate of 635,000, but there’s a huge caveat. The pace of new-home sales in June was raised to 12-year high of 728,000 from a preliminary reading of 646,000 — what Regions Financial chief economist Richard Moody called a “ridiculously large revision.” The last time sales were that strong was in 2007, just before the Great Recession got underway.

The initial monthly report on new-home sales, to be sure, is often quite volatile and prone to large revisions, as was the case in June. Yet in a good sign the level of sales last month was 4.3% higher compared to July 2018. What happened: Sales fell in all four major regions in July, led by a 50% decline in the Northeast. Fewer new homes are built each year in the densely populated Northeast than other parts of the country such as the South and West, where more than 80% of new construction takes place. Yet sales are still running higher in the Northeast, South an
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