The housing sector took a hit this morning on news that New Home Sales declined by nearly 14% from June to July to the lowest level in nine months. New Home Sales fell to 394,000 units annualized and below the 485,000 that was expected. In addition, June was revised lower to 455,000 from the 497,000 that was first reported. The rise in home loan rates could be one of the factors in the decline while July isn’t the best month of the year for home sales.
Within the details it showed that the median home price is at $257,200, up from $237,400 in July of 2012. The supply of new homes is 5.2 months, up from 4.3 months in June. A normal supply is about six months. New Home Sales rose 6.7% from July 2012 to July 2013.
The Bond markets got a big lift today after several Fed members mentioned that the Federal Reserve’s QE III Bond buying program should continue on its present course. In addition, the weak housing data also helped to give Bonds a bounce. Recently, Bond prices have declined causing home loan rates to rise.