No Joy in New Home News

The report this morning on June new home sales blunted much of the optimism generated by yesterday's news about existing home sales.  The Census Bureau and the Department of Housing and Urban Development jointly reported that new home sales fell by 6.8 percent month-over-month to a seasonally adjusted annual rate of 482,000 units. 

Further, May sales, originally reported as rising 2.2 percent from the previous month to a rate of 546,000 units were revised down to 517,000, lower than April's number which was also lowered by 11,000 from an earlier revised number.  While June sales were 18.1 percent above those a year earlier they represented the slowest pace for new home sales since last November.

The report was certainly not what was expected.  Econoday's survey of housing analysts had gathered estimates ranging from 535,000 to 570,000 units with a consensus of 550,000.

The decline was widespread, hitting every region but the Northeast which has seen a particularly strong recovery from its unusually harsh winter.  Sales there were up 28.0 percent from April and 23.1 percent year-over-year. 

New home sales declined by 11.1 percent in the Midwest but remained 5.7 percent higher than a year earlier.  In the South there was a 4.1 percent dip from the previous month but sales increased by 23.7 percent from June 2014.  The West had the largest month-over-month decrease at 17.0 percent but still posted a 10.9 percent annual increase.  

On a non-adjusted basis new home sales nationally numbered an estimated 45,000 units, down from a revised 48,000 in May.  May's sales were originally estimated at 51,000 units.

The median price of a new home sold in June was $281,800 compared to $287,000 in June 2014.  The average price declined from $338,100 a year earlier to $328,700.

At the end of June there were an estimated 215,000 new homes available for sale, an increase of 3.4 percent from May and 8.6 percent for the previous June.  Homes currently for sale represent a 5.4 month supply at the current rate of sales, up from 4.8 months in May. Homes sold in June were on the market an estimated average of 4.0 months.