New Figures Suggest US Property Market Beginning to Stabilise
28 July 2011
Although sales of new single-family homes were down in June, an increase in prices and declining supply does suggest the market is finally beginning to stabilise. Additional data showed that consumers are feeling more confident, even though they are concerned about unemployment figures.
According to the Commerce Department, sales of new single-family homes dropped 1% giving a seasonally adjusted annual rate of 312,000 units, but the median price for a new home increased by 5.8% in June to $235,200. When compared to June 2010, the price increase is 7.2%, and does seem to indicate that prices are stabilising.
As there is no substantial inventory of unsold new property, it's been predicted that prices should become a lot firmer, although there remains the problem of a glut of previously owned homes which now cost far less than new build homes. There were just 164,000 new homes for sale in June, compared to 3.77 million previously owned homes, although this figure doesn't include foreclosure properties.
Latest figures for the index of consumer attitudes also increased from 57.6 to 59.5 in June, beating predictions of 56.0, although one analyst has pointed out that this improvement in consumer confidence is actually for the future, and recent figures for retail sales and employment suggest that growth is still sluggish.
The economy is being predicted to grow and just 1.8% annually, and consumer spending is still being held back by high petrol prices, while supplies of some motor vehicles are still being disrupted due to the problems in Japan.