By Nancy Trejos
Washington Post Staff Writer
Wednesday, June 27, 2007; D02
Sales of new homes fell nationwide in May, showing no signs of recovery for
the weakest housing market in more than a decade.
The Commerce
Department reported yesterday that sales of new, single-family houses
fell 1.6 percent last month to a seasonally adjusted annual rate of 915,000.
At that pace, it would take 7.1 months to dispose of the supply of unsold
homes.
The glut of inventory, combined with higher mortgage rates this month, means
a lasting recovery is still far off, some economists said. Complicating matters
is the rising foreclosure rate among people with poor credit — subprime borrowers
who have adjustable-rate mortgages with low introductory teaser rates that
are starting to increase. Lenders have responded by tightening their credit
standards, shutting out many potential buyers.
"Because of the magnitude of the supply we have in both existing and
new homes, we’re not going to see a quick bounce-back," said Mike
Larson, a real estate analyst at Weiss Research in Jupiter, Fla.
In another indication of weakness in the industry, Lennar, a leading home
builder based in Miami,
reported a second-quarter loss of $244.2 million, compared with a profit of
$324.7 million in the comparable quarter a year earlier. The loss came even
though the company cut prices and offered buyers other incentives.
See the full article
here:
http://www.washingtonpost.com/wp-dyn/content/article/2007/06/26/AR2007062600663_pf.html
