New Home Sales Decline from Downgraded May Numbers

New homes sales retreated in June from the very strong performance reported for May; a performance that turns out to have been less strong. A joint release from the Census Bureau and the Department of Housing and Urban Development this morning put June sales of newly constructed single family homes at a seasonally adjusted annual pace of 406,000 units. This represents an 8.1 percent drop from the revised May rate of 442,000. May sales however were originally estimated to be at the rate of 504,000 units which would have been an 18.6 percent increase over April and, the report said, the most rapid increase in 20 years.

June sales were also down, by 11.5 percent year over year. Those sales were estimated at 459,000.

On an unadjusted basis there were 38,000 new homes sold in June, down from 42,000 in May and 43,000 a year earlier. Unadjusted May sales were originally estimated at 49,000 units.

There were an estimated 197,000 homes for sale at the end of June, a 5.8 month supply at the current rate of absorption. One year earlier there was an estimated 4.2 month supply. Homes that sold in June were on the market an estimated 3.4 months, unchanged from May but substantially below the 4.2 months required for marketing a year earlier.

The median price of a new home sold in June was $273,500 compared to $259,800 in June 2013. The average price was $331,400 compared to $306,100 in the earlier period.

Sales in every region were lower than in May; 20.0 percent in the Northeast, 8.2 percent in the Midwest, 9.5 percent and 1.9 percent in the South and West respectively. The Midwest had the only year-over-year increase, up 19.6 percent from the previous June. Sales in the Northeast declined 27.3 percent and were down 17.4 percent in the south and 9.4 percent in the West.