National Trend: Housing numbers signal end of boom

Unsold homes hit record high mark.

Sales of new homes dropped in July by the largest amount since February while the inventory of unsold homes climbed to a record high.

Piling on more proof that the housing boom is over, the Commerce Department reported Thursday that new home sales fell by 4.3 percent last month to a seasonally adjusted annual sales pace of 1.072 million units.

The July level of 1.072 million units sold was down 21.6 percent from a year earlier and below the 1.100 million that had been expected by analysts.

“Builders are offering many extras to entice buyers,” said Peter Morici, a professor at the University of Maryland’s business school. “Overall, values are falling and builders’ profits are threatened.”

Analysts expect home sales to drop by some 10 percent this year. Prospective home buyers have turned cautious about making such a big-ticket purchase as mortgage rates have gone up and uncertainty has risen over whether the economy and job creation will keep slowing, analysts said.

The data follow another report Wednesday that also provided evidence of how much the once-sizzling housing market has cooled.

Sales of previously owned homes dropped 4.1 percent in July from June to a 2½-year low, while the inventory of unsold homes climbed to a record high, the National Association of Realtors reported.

Source: Marcy Gordon, The Associated Press