New Home Sales Vs. Existing Home Sales: Guess Which Is Winning?

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It’s the battle of new home sales vs. existing home sales. Existing home sales are thus far winning.

Seems sales of new homes fell last month 0.6 percent, according to the Commerce Department—-that apparently came as a surprise to some “experts” who had predicted the rate of new home sales would actually rise. Oh well.

Over the course of the past year, new home sales are now down 32.8 percent, in fact.

This is in contrast with the sale of existing homes–the sales rate there actually went up in May by 2.4 percent.

Pretty easy to see what is going on here.

Most of the existing homes are foreclosed properties and cheaper, therefore, than they would otherwise be.

But sales of such homes do not bring with them increased employment–at least not to the degree that newly constructed homes do.

Those who see “hope” for an economic recovery in the sales of existing homes are chasing a false dream.

The real sign of a turnaround will come when we start seeing sales of newly constructed homes increase on a steady and monthly basis.

Clearly, we are not there as yet!

About Author

Charles is currently reporting for KNX Radio in Los Angeles, is the co-author of the book No Time To Think, and can be found commenting about the news on his blog, The Feldman Blog, as well as on The Huffington Post.


  1. I think it would be optimistic to say that we were in a recovery, we still have financial issues to resolved that can’t be ignored. Now is a good time to buy property whether it be a foreclosure or a resale there are definately some good deals to be had when you know how to negoatiate a good deal and secure a tenant before you buy.

  2. With so many foreclosures on the market at diminished values it’s not surprising that new home construction hasn’t as of yet rebounded. Even with an $8000 tax credit for first time buyers the opportunity escapes these potential purchases in the face of the disparaging economic client.
    Business will pull us out of this recession and not the government. This has been proven time and time again. Only now are we seeing a change in direction that seemingly has been tried and failed in the past (I am referring to Truman’s stimulus spending that carried us into a great depression). Perhaps however this current economic climate will pave the road towards a newly realized opportunity that promotes the construction of new homes – however with the commercial real estate bust seemingly looming, I’m not so sure we’ll see a rebound anytime soon.

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