New-Home Sales Steady in June; Million-Unit Pace Sets New Record

Aug. 16, 2002
Indicating that housing demand continues to be exceptionally strong, sales of new single-family homes rose half a percent to a seasonally adjusted annual

Indicating that housing demand continues to be exceptionally strong, sales of new single-family homes rose half a percent to a seasonally adjusted annual rate of just over one million units in June from a revised 996,000-unit pace in May, the Commerce Department reported.

“June of 2002 is now the best month on record for sales of new single-family homes,” said Gary Garczynski, a builder/developer from Woodbridge, Va., and president of the National Association of Home Builders (NAHB). “This strong showing is evidence of continued stability in the market and indicates that May's healthy sales pace was no fluke.” He said home builders see buyers being attracted to the market by low interest rates and the solid investment prospects of home ownership.

The number of unsold new homes on the market edged down by 1,000 units in June to 325,000, a relatively lean 3.9 months' supply at the current sales rate.

Regionally, new-home sales were mixed in June. The Midwest and West each posted 3.8 percent gains, while the Northeast and South posted 1.4 percent and 2.7 percent declines, respectively.

Garczynski noted that new-home sales for the first half of this year were running 2.7 percent above their year-earlier pace. “It looks like we're on track to set a new record in 2002, besting last year's record 908,000 units by about 3 percent,” he said. He added that Freddie Mac's latest survey, which reports that the average interest rate on 30-year fixed mortgages for the week of July 25 fell to a 35-year low of 6.34 percent, is further reason to expect continued strength in home sales.