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!