Sales of new US homes fall by 9.9 percent in August
WASHINGTON - The National Association of Realtors said today that the sales of new homes in the United States decreased by 9.9 percent in August, while the number of homes up for sale scaled new highs.
Existing home sales surged to a new high in August and hit the 7.29 million unit annual rate. Prices for these homes spiraled by 15.8 percent to $220,000, the highest increase in 26 years, the National Association of Realtors said. Analysts were predicting that the sales would decline to 7.11 million units as the mortgage rates have soared in recent times.
"This virtually guarantees another record year. It is a little concerning. The implication here is that over-valuation is becoming more prevalent. There is no disputing that price increases are far outstripping income gains," observed Richard DeKaser, chief economist at National City Corp. in Cleveland, Ohio.
The Housing inventory rose 3.5 percent to 2.86 million existing homes in August. This figure is the highest since May 1986. The Realtor's group was categorical in stating that Hurricane Katrina, which caused massive destruction in the Gulf Coast, had affected the sales late in August, but warned that it would be several months before the real extent of the damage was known. However, Kevin Harris, chief economist at Informa Global Markets, a financial analyst in Manhattan opined that the figures for August were fantastic, "There is nothing solid in the latest round of existing home sales data to show that we're slowing down," he said.
But sales in New Orleans which bore the brunt of the storm were disrupted leading to skewed figures, NAR President Al Mansell issued a statement saying, "There will be a mixed impact in figures over the next couple months with total disruption in the hurricane disaster zone, offset by spiking sales from displaced residents in nearby regions which escaped heavy damage."
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