Dive Brief:
- Sales of new, single-family homes fell 6.8% between May and June to a seasonally adjusted annual rate of 482,000, the U.S. Census Bureau and the Department of Housing and Urban Development announced Friday.
- However, that figure — the lowest in seven months — is still 18.1% higher than during June of 2014.
- The results defied predictions, as economists polled by Bloomberg had estimated that new home sales would grow 0.3% month-over-month.
Dive Insight:
The decline in June sales — following a 2.2% bump in May — puts a slight damper on recent optimism sparked by the NAR's Wednesday announcement of a 3.2% rise in June existing home sales and the NAHB's recent report of homebuilder optimism at a 10-year high.
After last month's positive new home results, some economists warned that tight housing inventory could slow the rising sales. This issue has proven especially applicable for new-home buyers, as they have had increasing difficulty finding affordable starter homes.
June's disappointing new home sale results affirm their suspicions. New home sales represent about 10% of the total housing market. NAR's report on June pending home sales, released next week, will help offer a clearer picture of June's overall housing market strength.
