I love the way the Fort Worth Star Telegram started this story:

 “New-home sales in Dallas-Fort Worth continue to decline, according to the latest quarterly market report from Metrostudy, released Wednesday.”

Actually, I don’t love it. I think it stinks. Of course NEW home sales declined. Of course builders closed sales on only 3,505 new homes from April to June 2011, more than a quarter (26 percent) less than they closed second quarter of 2010. Remember this thing called the First-Time Homebuyer’s Credit?

Steve Brown didn’t do much better:

D-FW new-home market still losing ground from a year ago

Why do most reporters bury the good stuff, like the fact that home sales — I’m talking re-sales of existing homes — are up nearly 9 percent from the first quarter of 2011? And pending sales, said Metrostudy, were up 35% in May from a year ago.

I know why: because new home starts affect our economy more than re-sales.

Now if you want to compare everything to those days when the real estate world was on steroids, new home sales peaked about the third quarter of 2007.  A whopping 10,037 homes were sold. So anything done now in this recession is going to look extremely wimpy. And truth be told, DFW home starts are down a good 70% from that high. We are at a 15 year low in new home inventory, which is frankly amazing and I marvel at any home builder who is still standing. You can thank tighter lending practices and all the foreclosures the market is trying to absorb, but you can REALLY thank the recklessness of Wall Street. Builders cannot start homes without financing, and with higher down payment requirements, fewer builders can get into the game. Way fewer. 

But! The good news is that compared to first quarter 2011, home starts in the second quarter are up 18 percent, so says the folks at Metrostudy.

In fact, David Brown, director of the Dallas-Fort Worth office says it looks like first quarter 2011 may be the low point in home-building activity, you know, after those tax credits expired.

“We are beginning to see signs the housing market is slowly coming off the bottom after the drop-off in sales that began in May of last year.”

Inventory of finished new homes was 8,658, end of June 2011 which is down 25 percent from the end of June 2010, he said. But Brown says that if current job trends hold strong, if unemployment should fall, new home sales could pick up in 2012. The Catch-22 here is that building new homes creates jobs —    but you cannot build a home without financing. The estimated one-year local impact of building 100 single family homes in a typical metro area is an infusion of $21.1 million in local income, $2.2 million in taxes and government revenue, and 324 jobs. This according to the National Association of Home Builders.