New Home Sales Improve Year-Over-Year

The latest report from the Commerce Department showed that while sales of newly sold properties decreased on a monthly basis in August, they increased year-over-year. That could signal improved long-term growth for the housing market.

New single-family residential sales reached a seasonally adjusted annual rate of 295,000 units in August, according to the report. Though that was down 2.3 percent from the previous month, the figure was a 6.1 percent improvement from the 278,000 pace reported during August 2010.

The agency estimated that there were a seasonally adjusted 162,000 newly built homes available for sale in August. That translates to a 6.6-month supply, meaning it would take roughly that long to eliminate that supply at the current sales pace. Housing experts note a six-month supply is typically what's found in a "healthy market."

Industry figures responded to the report with some optimism, though home builders note most homebuyers appear to be in the market for existing homes, which are more affordable and plentiful than newly built properties.

Bob Nielson, chairman of the National Association of Home Builders, said the new homes market is most favorable for first-time homebuyers, who don't have to wait to sell a current home before buying a home.

Even so, existing homes remain attractive to both first-time and repeat homebuyers for their affordability. Some consumers turn to home improvement loans to help them finance project properties, which may require extra work, such as painting, re-carpeting or repair.

If you're testing the market and looking for an existing property seems more suitable than building a home, determine some common needs and desires so that you can narrow down your options on the market. You're not going to find everything you want in a single property, but having a general idea of location and amenities can prevent a drawn out home shopping experience.