New-Home Sales Grow, Spur Wall St.

But new figures don't fully reflect credit market's impact, analysts say

By Wesley Oliver,  Newser Staff

Posted Aug 24, 2007 11:21 AM CDT

(Newser) – New-home sales grew 2.8% last month, delivering an unexpected bit of good news to investors still reeling from the credit crunch. But the housing market, which had been rebounding in recent months from a slump, will likely show renewed weakness after he mortgage crisis dust settles, Bloomberg reports.

Officials at the Federal Reserve say the nation’s worst housing slump in 16 years will continue to dog its economic growth, conceding that pessimism in the real estate sector could spread to other areas of the economy. One analyst speculated that tougher restrictions on credit “could further dampen residential investment.”

A D.R. Horton home builder sold sign sits in front of a newly built home in the Kingston Meadows development in Glenn Heights, Texas, in this Jan. 20, 2007 file photo. D.R. Horton, one of the nation's largest homebuilders, said Thursday, April 19, 2007 its fiscal second-quarter earnings...
A D.R. Horton home builder sold sign sits in front of a newly built home in the Kingston Meadows development in Glenn Heights, Texas, in this Jan. 20, 2007 file photo. D.R. Horton, one of the nation's...   (Associated Press)
A new home under construction sports a sold sign in the front yard in the Choate Farm neighborhood in Danvers, Mass., Wednesday April 25, 2007.  Sales of new homes, helped by better weather, posted a modest increase in March, but the gain was less than expected and did not dispel...
A new home under construction sports a sold sign in the front yard in the Choate Farm neighborhood in Danvers, Mass., Wednesday April 25, 2007. Sales of new homes, helped by better weather, posted a...   (Associated Press)
The sign stands outside an unsold new home in the east Denver suburb of Aurora, Colo., on Sunday, Aug. 19, 2007. The Commerce Department reported Friday that new-home sales rose 2.8 percent in July, after falling 4 percent in June. The increase in July lifted sales to a seasonally...
The sign stands outside an unsold new home in the east Denver suburb of Aurora, Colo., on Sunday, Aug. 19, 2007. The Commerce Department reported Friday that new-home sales rose 2.8 percent in July, after...   (Associated Press)
Homes with for sale signs are shown in Vallejo, Calif., Wednesday, Aug. 15, 2007. July home sales in a nine-county swath around San Francisco Bay dropped 12 percent over what they were during the same period last year, but median prices remain stable. (AP Photo/Jeff Chiu)
Homes with for sale signs are shown in Vallejo, Calif., Wednesday, Aug. 15, 2007. July home sales in a nine-county swath around San Francisco Bay dropped 12 percent over what they were during the same...   (Associated Press)
For sale signs are shown in front of homes in Vallejo, Calif., Wednesday, Aug. 15, 2007. July home sales in a nine-county swath around San Francisco Bay dropped 12 percent over what they were during the same period last year, but median prices remain stable. (AP Photo/Jeff Chiu)
For sale signs are shown in front of homes in Vallejo, Calif., Wednesday, Aug. 15, 2007. July home sales in a nine-county swath around San Francisco Bay dropped 12 percent over what they were during the...   (Associated Press)
A home is advertised for sale at a foreclosure auction in Pasadena, Calif., Tuesday, Aug. 14, 2007. Home sales in a six-county region of Southern California dipped to a 12-year low for July as a growing percentage of homes went on the market as a result of foreclosures, a research...
A home is advertised for sale at a foreclosure auction in Pasadena, Calif., Tuesday, Aug. 14, 2007. Home sales in a six-county region of Southern California dipped to a 12-year low for July as a growing...   (Associated Press)
A newly constructed  home waits for an owner in Bainbridge Twp., Ohio on Thursday, July 26, 2007.  Sales of new homes fell in June by the largest amount in five months as the housing industry continued to struggle with its worst downturn in 16 years. The median home price also...
A newly constructed home waits for an owner in Bainbridge Twp., Ohio on Thursday, July 26, 2007. Sales of new homes fell in June by the largest amount in five months as the housing industry continued...   (Associated Press)
A sold sign is shown in front of a new home under construction, Wednesday, July 25, 2007 in Columbus, Ohio. Sales of new homes fell in June by the largest amount in five months as the housing industry continued to struggle with its worst downturn in 16 years. The median...
A sold sign is shown in front of a new home under construction, Wednesday, July 25, 2007 in Columbus, Ohio. Sales of new homes fell in June by the largest amount in five months as the housing industry...   (Associated Press)
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