July new home sales were the third worst since the government began tracking the numbers in 1963. And while builder confidence has increased slightly from its low in January, it remains the lowest in 25 years. Poor builder confidence continues to hold housing starts at record lows, and most builders see a very gradual recovery over several years.
While recent news reports have focused upon slight month to month improvements, the reality for new homes and housing in general is that the market is still millions of units below "normal" sales and will remain there for the foreseeable future. Expected increases in foreclosures during the remainder of 2009 and into 2010 will continue to depress prices, and high unemployment will inhibit sales.
For an in-depth analysis of the housing picture with several easy to understand graphs, visit: Calculated Risk Blog.
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