New home sales soar and plummet

The housing market is clearly improving -- and still lousy

By Andrew Leonard
Published July 27, 2009 2:56PM (EDT)

Wall Street Journal News Alert: "New-Home Sales Soared 11 percent..." Bloomberg headline "...Most in Eight Years."

An accurate rending, if you are comparing month-to-month. Compared to June 2008, however, new home sales fell 21 percent. Yes, the rate of plummet is slowing, but a 20 percent drop is still a cliff dive.

Median prices also continue to fall, both on a month-to-month and yearly basis.

And yet, there seems little question that the the housing market is finally stabilizing. In recent months, existing home sales, home construction, and building permit levels have all risen. And perhaps most significantly, the June new home sales data indicate that the length of time necessary to sell off the inventory of unsold homes fell from 10.2 months in May to 8.8 months in June. That is the biggest drop in several years.

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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