Daily Economic Update: New Home Sales

Source: NAR 

According to NAR, new home sales fell short to 295,000 homes. The low number of new home sales is due to the fact that builders are not buildings as many houses, because of the stringent construction loan requirements. One reason for the tighter construction loan originations is because the government does not back these loans. According to the data from NAR, the new home inventory is at 40-year lows. Currently, there are a mere 162,000 new homes on the market, compared to the inventory of 600,000 new homes during the boom in 2005 to the collapse, normal inventory for new homes is around 300,000. During a normal real estate market, which seems ludicrous to say, new home sales account for roughly 10 percent of total home sales. In today's real estate market, new home sales account for approximately 5 percent of total sales.

Daily Economic Update: New Home Sales