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Surprise! New home sales hit another high. In July a record pace of 1.41 million new homes were sold (that figure is annualized and adjusted for seasonality), up from June’s prior record of 1.32 million. That’s a 6.5% jump, when economists were expecting a slight dip.
But today’s report wasn’t all good news. The homes sold in prior months were revised down significantly (which could mean july’s figures get scaled back, notes Action Economics). The median price (the price at which half the homes were more expensive and half cheaper) dropped 7% from $219,500 to $203,800 — the lowest price since December, 2003. Homes in inventory rose 1.8% to a record 460,000 units.
Despite the strong sales, the Action Economics’ overall read on the report was quite negative: “Historically, new home sales activity leads existing activity, which does bring some concern.”
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.