U.S. New Home Sales Pull Back Off 15-Month High In June
A report released by the Commerce Department on Wednesday showed a notable pullback in new home sales in the U.S. in the month of June.
The Commerce Department said new home sales slumped by 2.5 percent to an annual rate of 697,000 in June after surging by 6.6 percent to a downwardly revised rate of 715,000 in May.
Economists had expected new home sales to tumble by 5.0 percent to a rate of 725,000 from the 763,000 originally reported for the previous month.
The downwardly revised rate of new home sales for May still represents the highest level since hitting 773,000 in February 2022.
“We expect new home sales to soften further as the economy enters a recession and the labor market soften,” said Nancy Vanden Houten, U.S. Economist at Oxford Economics. “However, a tight supply of existing homes and resilient demand should keep a floor under sales.”
The pullback came as new home sales in the Midwest plummeted by 28.4 percent and new home sales in the West plunged by 13.9 percent.
On the other hand, the report said new home sales in the northeast skyrocketed by 20.6 percent and new home sales in the South jumped by 4.3 percent.
The Commerce Department also said the median sales price of new houses sold in June was $415,400, down 0.5 percent from $417,300 in May and down 4.0 percent from $432,700 a year ago.
The estimate of new houses for sale at the end of June was 432,000, which represents 7.4 months of supply at the current sales rate. The months of supply is up from 6.3 in May but down from 9.5 in June 2022.
Last Thursday, the National Association of Realtors released a separate report showing U.S. existing home sales fell by more than expected in the month of June.
NAR said existing home sales tumbled by 3.3 percent to an annual rate of 4.16 million after inching up by 0.2 percent to a rate of 4.30 million in May. Economists had expected existing home sales to decrease to a rate of 4.23 million.
With the bigger than expected slump, existing home sales fell to their lowest level since hitting a rate of 4.00 million in January.
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