New home sales drop
Sales of newly built, single-family homes slowed 8.4 percent to a seasonally adjusted annual rate of 350,000 units in June following an upwardly revised, strong pace in the previous month, according to figures released today by HUD and the U.S. Census Bureau.
“While we would have liked to see a third consecutive month of new-home sales gains in June, the fact remains that the sales numbers are up on both a quarterly and yearly basis, while builders continue to report that they are seeing more serious buyers in the market for a newly constructed home with all of the latest updates,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, FL.
Regional performance varied. Widely.
Regionally, new home sales performed quiute differently. Sales in the Midwest actually rose 14.6 percent, also rising 2.1 percent in the West, but dropped 8.6 percent. In the northeast, new home sales plummeted 60 percent in June.
Meanwhile, the inventory of new homes for sale was virtually unchanged for the month at 144,000 units, which represents a relatively slim, 4.9-month supply at the current sales pace.
“The lower number of new-home sales in June represents an adjustment from a robust level of activity in May, yet overall results for the second quarter show we are still on track for continued improvement,” observed NAHB Chief Economist David Crowe. “That said, the very tight inventory of new homes for sale at this time poses a challenge to builders, who’d like to have a larger selection for buyers to choose from but continue to confront issues with obtaining credit to build viable new projects.”
No size of lady has sung yet…
Prior to this setback, builder confidence has been on the rise, and earlier this month it was reported that construction spending hit a 2.5 year high, as housing starts hit a four year high, which both point to a shift in the new home construction sector, and even as sales slip for the month, they are projected to continue their slow, upward projection in coming years.