Sales of new single-family homes rose 3.6% in July from June and more than 25% from a year ago, beating forecasts in yet another sign of recovery in the housing market. But the median home price fell from a year ago in the government report Thursday, clouding the picture.
Separately, a negative-equity study by Zillow.com showed a declining share of homeowners nationwide — but still a lot — are underwater on their mortgages, owing more than their homes are worth.
The Commerce Department said July U.S. new-home sales hit a seasonally adjusted annual rate of 372,000, matching a two-year high set in April. The median price fell 2.5% year over year to $224,200.
Zillow says 30.9% of U.S. homeowners with mortgages (15.3 million) were in a negative equity situation in the second quarter, down from 31.4% in the first as home values rose. It's positive news for the housing market's health, but Zillow noted that nearly half of borrowers under age 40 remain underwater.
That's cramping their ability to sell and move, Zillow Chief Economist Stan Humphries says, and accounts for some inventory shortage at the low end of the market.
"These homes are likely the very starter homes potential first-time homebuyers are seeking," he said in the study announcement.
New homes are seen as the domain of move-up, not first-time, homebuyers. First-timers can't as easily put 20% down or get mortgages with today's tighter lending.
Amid hopes for growth, IBD's Building-Residential/Commercial group ranks No. 3 of 197 industry groups. On Thursday, high-end builder Toll Bros.' (TOL) stock fell about 1% after rising Wednesday on better-than-expected earnings and strong orders. The largest U.S. homebuilders, D.R. Horton (DHI) and Lennar (LEN), slipped about the same.
