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August 24, 2005
New home sales soar, but median price drops
Surprise! New home sales hit another high. In July a record pace of 1.41 million new homes were sold (that figure is annualized and adjusted for seasonality), up from June's prior record of 1.32 million. That's a 6.5% jump, when economists were expecting a slight dip.
But today's report wasn't all good news. The homes sold in prior months were revised down significantly (which could mean july's figures get scaled back, notes Action Economics). The median price (the price at which half the homes were more expensive and half cheaper) dropped 7% from $219,500 to $203,800 -- the lowest price since December, 2003. Homes in inventory rose 1.8% to a record 460,000 units.
Despite the strong sales, the Action Economics' overall read on the report was quite negative: "Historically, new home sales activity leads existing activity, which does bring some concern."
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