The number of new homes available for sale nationwide dipped to 163,000 at the end of August — a new low in records dating to 1963. And the sluggish sales pace, which translated to 6.6 months of new-home inventory, could make 2011 the worst year on record for homebuilders.
Sales of new homes fell 2.3 percent from July to August to a seasonally adjusted annual rate of 295,000 per year, according to the latest numbers from the Census Bureau. Looking back a year, new-home sales were up 6.1 percent but the median price of new homes fell 7.7 percent, to $209,100.
The months’ supply of new-home inventory peaked in January 2009 at 12.2 months. Although the months’ supply is now closer to the 6 months that many analysts consider to be a more healthy balance between supply and demand, there’s still no shortage of new homes at the current pace of sales, which isn’t expected to pick up any time soon.
In a forecast issued this month, economists at Fannie Mae said they expect new-home sales will total 305,000 this year, which would be a 5.6 percent decline from 2010 and the lowest total on record. Fannie Mae projects that new-home sales will remain subdued next year, totaling 329,000, before climbing to 462,000 in 2013.
New-home sales exceeded 1 million a year from 2003 through 2006. In the last two housing downturns, new-home sales bottomed out at 509,000 in 1991 and 412,000 in 1982.
The picture varies at the regional level. In the Midwest, new-home sales were up 8.2 percent from July to August, and up 65.6 percent from a year ago. In the Northeast, new-home sales fell 13.6 percent from July to August and 36.7 percent from a year ago.
While new-home sales in the South were down 2.4 percent from July to August, they were up 9.3 percent from a year ago. In the West, new-home sales were off 6.3 percent from July to August and down 10.6 percent from a year ago.