SALES SLIP, RECORD LOW INVENTORY

New Home Sales Tuesday July 26, 2011

20 10 400 Monthly % Change 0 -10 -20 -30 -40 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11
Monthly % Change Sales (Thousands of Units)

450

Thousands of Units

350

300

250

Record High: 1389k (07/05)

Percent Change from Record High: -77.5%

New home sales fell 1.0% in June to an annualized pace of 312k, compared to market expectations for a small increase of a rate of 320k. Meanwhile the prior month was revised slightly lower. Despite this months decline, new home sales are 1.6% above their year ago level in June 2010 but remain off a stunning 77.5% below their peak level of July 2005. At just over a 300k annual rate over the past year, new home sales remain exceptionally weak. Regionally, sales were mixed with a large 15.8% decline in the Northeast and a 12.5% decline in the West, with gains of 9.5% and 3.4% in the Midwest and South respectively. The inventory of new homes available for sale fell 1.8% in June to a record low level of 164k which represents a 6.3 month-supply at the current sale pace. Such low inventory levels will support pricing and the potential for new residential construction when demand strengthens. Home prices were up from one year ago; median sales prices gained 7.2% from June 2010 to $235,200 as average prices picked up 4.8%% to $269,000. New home sales remain quite slow and continue to face competition from the large number of distressed properties on the market. Demand remains constrained by slow job growth, tight credit and higher energy costs. It will be a rebound in the broader economy that would restore demand drivers and get homebuilding and new home sales back on track . THOUSANDS OF UNITS
Forecast: Consensus*: Actual: 310k 320k 312k Monthly Jun-11 312 -1.0 16 -15.8 46 9.5 181 3.4 69 -12.7 164 6.3 235.2 7.2 269.0 4.8 May-11 315 -0.6 19 -24.0 42 2.4 175 2.3 79 -1.3 167 6.4 222.4 -3.5 264.3 -6.0 Apr-11 317 3.9 25 0.0 41 5.1 171 0.0 80 14.3 173 6.5 223.9 7.5 267.3 -1.2 Mar-11 305 8.5 25 31.6 39 25.8 171 0.6 70 14.8 178 7.0 220.5 -1.9 260.8 -0.8 Three Month 315 Six Month 307 Twelve Month 301 Average for 2010 321 -14.1 31 -2.7 45 -17.7 173 -14.5 74 -15.3 190 8.0 221.2 3.1 271.5 1.2 2009 374 -22.4 31 -11.1 54 -21.8 202 -23.8 87 -22.9 234 9.0 214.5 -6.9 268.2 -7.2 Five Year 599 Ten Year 845

New Home Sales (percent change) Northeast (percent change) Midwest (percent change) South (percent change) West (percent change) Inventory Months of Supply Median Sales Price ($000) (year-on-year % change) Average Sales Price ($000) (year-on-year % change)

20 43 176 76

23 40 172 72

25 40 167 69

45 89 321 143

60 140 421 224

168 6.4 227.2 3.5 266.9 -1.0

175 6.9 227.0 2.9 266.7 -2.4

188 7.5 224.5 2.9 268.3 -1.7

362 8.5 230.6

376 6.3 215.4

288.2

268.2

Source: Bureau of the Census, Department of Commerce Via Haver Analytics. Data, graph & table courtesy of Insight Economics *Bloomberg 2011 HousingMatrix, Inc.| http://www.HousingMatrix.com | All rights reserved. Reproduction and/or redistribution are expressly prohibited. Hot Sheet is a registered trademark of HousingMatrix, Inc. Information contained herein is based on sources believed to be reliable, but accuracy is not guaranteed.