August 23, 2011 - Sales of newly built, single-family homes held virtually unchanged in July with a 0.7 percent dip from the previous month to a seasonally adjusted annual rate of 298,000 units, according to newly released data from the U.S. Commerce Department.
"The fact that new-home sales fell by less than one percent in July is an indication of how little conditions have changed in the housing market," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. "While new-home inventories are exceptionally thin, home builders are still competing with large numbers of foreclosed and distressed homes on the market and a climate of uncertainty in which consumers are reluctant to go forward with a major purchase for fear of what economic news tomorrow might bring."
"The sales pace of newly built, single-family homes in July was in line with what it has been over the last year, and this is in keeping with our forecast," said NAHB Chief Economist David Crowe. "While we expect to see some marginal gains in sales activity through the rest of 2011, we do not foresee any major advances until economic growth helps boost home buyers' confidence."
Regionally, new-home sales recorded declines of 7.4 percent in the South and 5.9 percent in the West, but rose 2.4 percent in the Midwest and actually doubled (100 percent increase) in the Northeast from a record low number in the previous month.
The inventory of new homes for sale in July fell to a 48-year record low of just 165,000 units, which represents a 6.6-month supply at the current sales pace. Putting this situation into perspective, said Crowe, "The current nationwide inventory of completed new homes ready for occupancy – at 61,000 units – is in keeping with what a single major metropolitan area such as Atlanta might sell in a typical year."
A Sept. 13th webinar will provide NAHB members and home builders associations with important information on dealing with the Occupational Safety and Health Administration’s recent stepped-up enforcement actions and increased penalties. While in past years commercial contractors were subject to the most inspections, residential builders are now routinely receiving inspections by OSHA.
The webinar – “How to Prepare for an OSHA Inspection” – will be held on September 13, 2011 from 1:00-2:30 p.m. EST.
The webinar will touch on a number of topics, including the rights of employers during an OSHA inspection, suggestions on what to do during the actual inspection, determining when to contest citations and how to obtain penalty reductions, and what legally-recognized defenses to OSHA citations employers can use, specifically as they relate to recent changes in the fall protection requirements.
Downward revisions to gross domestic product estimates last month showing an even weaker first quarter than previously reported led NAHB and other observers to lower projections for economic growth over the balance of 2011.
Combined with congressional gridlock over the debt ceiling and renewed fears over Europe’s debt crisis, this shook confidence and culminated in some highly volatile day-to-day swings in equity markets as they contemplated an uncertain near-term economic outlook.
Standard and Poor’s credit ratings downgrade of U.S. debt has added to the uncertainty, but demand for U.S. Treasury bonds emerged unscathed, and the U.S. was actually paying lower interest on its debt as the result of a “flight to quality” among investors rattled by the stock market.
The Federal Reserve Board of Governors reacted to the recent turn of events with an explicit commitment to maintain the federal funds interest rate at very low levels until at least mid-2013. This confirmed a timeline that many analysts had already factored into their forecasts and it should help support housing demand stemming from a healing labor market.
Despite worrisome economic and financial news, the housing market has remained steady, although at very low levels.The NAHB Housing Market Index was unchanged in August, with builder confidence languishing at roughly the same low level for the past nine months. Housing starts continue to bounce along the bottom, with a slight decline in July on the heels of a marked increase in June.