Joe Moshe, Broker/Owner, Charles Rutenberg Realty, says the decrease in new home sales and the large inventory of existing homes could be attributed to consumers' worries over high unemployment, low job growth and confidence in the economy. But he said that the rebound in new home construction will see the Real Estate market come back stronger in the future.
The Commerce Department reported today that sales of newly constructed homes in June were at an annual rate of 312,000, down 1% from May. It was the second straight month of declines. This comes on the heels of the National Association of REALTOR's recent report that existing home sales in June fell slightly by 0.8% to a seasonally adjusted rate of 4.77 million units in June, compared to May's figure of 4.81 million units. This signifies the third straight month of declines.
The results could be explained by several factors, including the unemployment rate - an indicator on how the housing market will fare - and consumer confidence. The Labor Department reported that the unemployment rate went up from 9.1% in May to 9.2% last month as employers only added 18,000 jobs to their payrolls. The same month, the Conference Board's Consumer Confidence Index was at 57.6, its lowest level in seven months.
"With unemployment going up and fewer companies hiring more people, it is impossible for someone to buy a house if they are unable to collect a steady income," Mr. Moshe said. "Those who are undeterred still need to contend with banks demanding near-perfect credit scores and higher down payments from borrowers, which means fewer people will be motivated to buy a new house."
The only bright spot is Commerce's recent announcement of new home constructions. The agency reported that builders began work on a seasonally adjusted 629,000 homes last month, up 14.6% from May. Most of the new construction is comprised of apartments, which jumped 31.8%. Single-family home construction rose 9.4%, its biggest increase since June 2009. Commerce also said that building permits - a gauge of future construction - was up 2.5%. Overall, June was the best showing in five months.
"Overall, the Real Estate market remains weak and is a drag on the overall economy," Mr. Moshe said. "But it appears to be a trying to move from a bottom, as evidenced by these reports showing it is moving one step forward and one step back."
Charles Rutenberg Realty is one of the nation's fastest-growing Agencies with more than 1,300 Agents on Long Island, Queens and Westchester. For more information, call (516) 575-7500, or visit www.crrli.com.
About Charles Rutenberg Realty
Founded in 2006, Charles Rutenberg Realty of New York is one of the nation's fastest-growing, most progressive Real Estate Agencies with over 1,300 Agents on Long Island, Queens and Westchester. Charles Rutenberg Realty specializes in residential properties in Nassau, Suffolk, Queens, Kings and Westchester Counties. Among the 1,900 independent Real Estate offices represented by Multiple Listing Services (MLS), Charles Rutenberg Realty has the highest market share for available inventory, listings taken for the first six months of the year and listings under contract. Its Agents are trained in the latest creative marketing programs and can fulfill all their clients' financial and personal needs when buying or selling a home. Charles Rutenberg Realty is headquartered in Plainview, New York, with offices in New York City, Florida and Illinois. For more information, call (516) 575-7500 or visit www.crrli.com.