Median Home Price Falls To Lowest Level Since 2003

Although US existing home sales improved slightly in August, new home sales remained flat compared to the previous month, and were down significantly compared with the same period …

Although US existing home sales improved slightly in August, new home sales remained flat compared to the previous month, and were down significantly compared with the same period last year. Median prices for new homes also dropped slightly compared with the same period last year. See the following article from The Street to learn more.

Sales of newly built homes were flat in August at a seasonally adjusted annual rate of 288,000, the Commerce Department said Friday morning. The figure came in below expectations for a rate of 291,000 after an all-time low rate rate of 276,000 in July.

July’s results were originally reported at a sales pace of 276,000, the worst on record until Friday’s adjustment to 288,000. May’s new-home sales pace of 282,000 was the slowest pace on record.

While the date came in below expectations and activity in the still-struggling housing market remains muted, it does point to some sense of stabilization.

The report came a day after the National Association of Realtors showed existing-home sales rebounded 7.6% in August to a better-than-expected seasonally adjusted annual rate of 4.13 million units.

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August’s new-home sales rate represented an 11% decline from year-earlier results.

The median sales price for new houses sold in August fell 0.6% to $204,000, the report said, the lowest since December 2003, while the average selling price was $248,000. The median price was 1.2% lower than year-earlier results. There were 206,000 new homes for sale at the end of August. Inventory fell 1.4% to the lowest level since August 1968. It would take 8.6 months to work through current inventory at the current sales pace.

Stocks in the homebuilder sector were mostly higher in trading on Friday morning, on a broadly bullish day for the market with U.S. equities looking to close the week with their fourth-consecutive weekly gain. The SPDR S&P Homebuilders(XHB_), an exchange-traded fund that tracks the homebuilder sector, gained 2.8%. The iShares Dow Jones US Home Construction(ITB_) rose 2.9%. NVR(NVR_) added 1.5%, D.R. Horton(DHI_) 3.6%, PulteGroup(PHM_) 4.3% and Toll Brothers(TOL_) 3.2%.

Lennar(LEN_) added 4.2%. Lennar said Monday it returned to year-over-year profitability, beating quarterly expectations on higher revenue and a greater number of home deliveries.

The housing market has been under tremendous pressure for some time, and demand fell further after the springtime expiration of federal tax credits for homebuyers. Most analysts agree the situation is likely to get worse before it gets better.

Near-record-low mortgage rates  have failed to spark demand for housing in recent months, but clearly had an effect on homeowners looking to lower their monthly payments through refinancing.

The average rate on a 30-year fixed mortgage fell to 4.44% last week, from 4.47% the week earlier.

A total of 81.1% of all mortgage loan applications last week were for refinancing existing mortgages , up from 80.5% in the prior week, according to data released by the Mortgage Bankers  Association on Wednesday. Even so, mortgage applications fell for the third straight week even as mortgage rates remained near all-time lows.

We recently asked our readers if another round of homebuyer tax credits would help or hurt the economy. Readers of TheStreet overwhelmingly agreed that  another homebuyer tax credit would benefit the housing market  and the entire economy. Out of 207 votes, 62.3% respondents voted yes while 37.7% voted no, viewing another tax credit as simply barking up the wrong tree.

The housing market  saw sales ramp up in March and April as consumers rushed to take advantage of tax credits that offered as much as $8,000 for first-time homebuyers and $6,500 for repeat buyers. Following the expiration of those credits on April 30, the market saw a dramatic decline in demand for the month of May that spilled over into June and July. Lawmakers later extended the deadline to close on a home purchase and still qualify for the tax credit to Sept. 30.

This article has been republished from The Street. You can also view this article at
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