July US home sales rise 2.4% as price falls slow

26 August 2008 16:54  [Source: ICIS news]

WASHINGTON (ICIS news)--US sales of single-family new homes rose 2.4% in July as housing prices continued to slide but at a slowing rate, according to government and commercial real estate sources on Tuesday.

 

The Commerce Department said that new single-family homes sold in July at a seasonally adjusted annual rate of 515,000 units, compared with the revised June rate of 503,000 homes purchased.

 

The department's report of July’s increase in new home sales comes a day after private US real estate officials said July sales of existing homes rose slightly more than 3%, suggesting that the long decline in the US housing sector may be at or near bottom.

 

The housing industry, especially new home construction, is a crucial downstream consuming sector for the chemicals industry and a broad array of chemicals-based products.

 

However, Standard & Poor’s (S&P) reported on Tuesday that US home prices continued to show broad-based declines in the second quarter this year, recording a record 15.4% fall compared with the second quarter of 2007.

 

That drop in second quarter home prices was more aggressive than the first quarter when single-family residence values were off by 14.2%, S&P said.

 

But S&P noted that the acceleration of home price decline was only moderate in June, the last month of the second quarter.

 

“The rate of home price decline may be slowing,” said David Blitzer, chairman of the S&P index committee.

 

“While there is no national turnaround in residential real estate prices, it is possible that we are seeing some regions struggling to come back, which has resulted in some moderation in price declines at the national level,” Blitzer said.

 

Price recovery in single-family homes is seen as an indicator of renewing demand and could signal a recovery for the critical housing sector.

 

“While still falling, these [price declines] are far less than the 2-2.5% monthly drops seen earlier in 2008,” Blitzer said.

 

Hints of a potential turnaround in the housing sector come just as new federal incentives for first-time home buyers are expected to influence the market.

 

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By: Joe Kamalick
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