Economist's Commentary: September 25, 2008

Quick Take on the Economy: September 25, 2008

By George Ratiu, Research Economist

New Home Sales (NHS) dropped 11.5 percent in August to 460,000 from July's revised number. On a year-over-year basis, sales were 34.5 percent lower.
The current inventory level of 405,000 is down 24.7 percent from a year ago.
The months' supply measure is at 10.9 months, a slight increase from July's 10.3 months.
Regionally, for August 2008 compared with July 2008, NHS fell 31.9 percent in the Northeast, increased 7.2 percent in the Midwest, declined 2.1 percent in the South and decreased 36.1 percent in the West.
For a visual overview, read more >

New orders for durable goods decreased 4.5 percent in August, to $208.5 billion, driven by declines in transportation equipment.
Shipments of durable goods declined 3.5 percent, to $210.1 billion. The drop in shipments was the largest percentage decrease since December 2002, and follows two consecutive increases in June and July.
Inventories of durable goods rose 0.7 percent in August, to $338.5 billion, the highest level since 1992.

New home inventories continue to decline. However, new home supply continues to compete with existing inventory, leading to a 5.5 percent decline in new home prices from last month. For homebuyers that translates into a lower selection of new homes, but improved affordability.
The decline in new home sales also points to further cuts in construction sector jobs.
The manufacturing sector is experiencing a slowdown, facing high inventories and decreased shipments. The slowdown follows a resilient first half of the year. Job gains are not likely in the sector.

This is one in a series of commentaries by the Research staff of the National Association of REALTORS®. Read more commentaries >

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