Friday, July 28, 2006
Glut of unsold new homes across US hits record high
The government said the inventory of unsold new homes on the market rose 0.7 percent in June to a record 566,000, representing a 6.1-month supply of brand new homes at the June sales pace.
Most of the unsold new homes are located in the south of the country, the report showed.
Apart from a slight one month drop in the inventory in May, the stock of unsold new homes on the market has risen steady over the last 12 months.
"Many individuals, who signed a (purchase) contract in what they had believed was a booming housing market, may now be backing out of those contracts," said Phillip Neuhart, an analyst at Wachovia Securities.
"Thus, the new home market is likely weaker than new home sales reflects. We expect both existing and new home sales to continue their slide throughout this year and the next," Neuhart said.
How about the sale of new motor homes? I hear they are doing well. (Inside Brain Droppings reference.)