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While not surprising to many who are following the housing market, new home sales have dropped 6.6 percent from last month and 22 percent off of June, 2006. Pricing did not take the same hit, it was down 2.2 percent from last year.

Builders are going to take a beating in the next few months. I hope they decide to cut way back on their projects. Higher inventories, tougher mortgages, and nervous buyers are not going to go away soon. Once inventories stabilize and the market gets it’s legs back, then we can move forward.

One thing though, the markets are reacting to the housing industry now. The two major indicators in the economy have been working against each other the past few years. When the stock market dropped in 2000–2001 the money went racing into housing. Then as housing slowed the money poured into the stock market pushing it to record highs. Now we are starting to see that when housing is hurting so is the stock market.

The Commerce Department reported that sales of new single-family homes dropped by 6.6 percent last month to a seasonally adjusted annual rate of 834,000 units. The decline was more than triple what had been expected and was the largest percentage drop since sales fell by 12.7 percent in January. Sales are now 22.3 percent below the level of a year ago.
The median price of a new home sold last month dropped to $237,900, down by 2.2 percent from a year ago. It was the biggest year-over-year price drop since a 6.5 percent fall in April. The median price is the point where half the homes sold for more and half for less. via  Yahoo! Finance.

Related posts:

1. Existing Single-Family Home Sales Drop 2.2 Percent In December - 13 Percent For Year
2. Nationwide Home Sales Drop In February, 2007
3. Massachusetts Home Sales Slump at Mid Year Mark
4. April 2007 New Home Sales Up Over March, Down 10.6 Percent Year Over Year
5. April 2007 Existing Home Sales Fall 2.6 Percent