New Home Sales Soften for Second Month

New home sales broke out of the up-one-month, down the next pattern they have adopted since March, and not in a good way.  The Census Bureau and Department of Housing and Urban Development reported that sales of newly constructed single-family homes retreated further in July, declining 1.7 percent on top of a 5.3 percent loss in June.  Sales during the month were estimated at a seasonally adjusted rate of 627,000 compared to a revised (from 631,000) pace of 638,000 units in June. Despite the decline, sales are still a healthy 12.8 percent higher than in July 2017.  That rate was estimated at 556,000 units.

Analysts polled by Econoday had been looking for a sales rate between 630,000 and 660,000.  The consensus was 649,000 units.

On a non-seasonally adjusted basis there were 53,000 homes sold.  The June estimate was 58,000 and there were 48,000 units sold in July 2017.  Through the end of July sales have totaled 401,000 compared to 374,000 during the same period in 2017.

Prices reversed direction from the previous two month when both median and average prices were lower than the same month in 2017. The median price of a home sold during July was $328,700 compared to $322,900 12 months earlier.  The average price increased from $372,400 to $394,300.  Of the 53,000 homes sold during the month, 21,000 or 39 percent sold for less than $300,000.

At the end of the reporting period there were an estimated 309,000 newly constructed homes available for sale. This is a 5.9 month supply at the current rate of sales.

Sales in the Northeast dropped by 52.3 percent from June and were 48.8 percent lower than the previous July. However, on a year-to-date (YTD) basis, 2018 sales are only 14.5 percent below the previous year.

The Midwest had a gain of 9.9 percent in sales for the month and is 18.2 percent ahead of the prior July. YTD sales are up 14.2 percent.

Sales dipped by 3.3 percent in the South but remain 17.2 percent higher on a year-over-year basis. The YTD estimate is up 8.6 percent.

Sales in the West increased 10.9 percent from June and 18.5 percent from July 2017. The region's YTD total is 6.5 percent higher than a year ago.