Washington, D.C.—Sales of newly built single-family homes edged 0.6% higher in June, rising to a seasonally adjusted annual rate of 627,000, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The past two months have been the slowest sales pace since October of last year, as mortgage rates averaged above 6.8% in June.“New home sales remained flat last month, highlighting persistent weakness in the housing market despite seasonal expectations for growth,” said Buddy Hughes, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Lexington, N.C. “Elevated mortgage rates and sustained price levels continue to limit purchasing power, particularly among first-time and middle-income buyers.”
Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis, added, “Despite targeted incentives and pricing adjustments by builders, demand remains tepid, suggesting these measures have had limited impact on overall sales volume. And while inventory conditions have stabilized, the flat performance signals continued buyer hesitation and a cautious outlook for the sector. Unless there is a material improvement in financing conditions or household income growth, a near-term acceleration in new home sales appears unlikely.”
A new home sale occurs when a sales contract is signed, or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the June reading of 627,000 units is the number of homes that would sell if this pace continued for the next 12 months.
New single-family home inventory continued to rise with 511,000 residences marketed for sale as of June. This is 1.2% higher than the previous month, and 8.5% higher than a year ago. At the current sales pace, the months’ supply for new homes remained elevated at 9.8 compared to 8.4 a year ago. Completed, ready-to-occupy inventory stood at 114,000 homes in June, up 21.3% from a year ago.
The median new home sale price edged down 4.9% in June to $401,800. This is down 2.9% compared to a year ago.
Regionally, on a year-to-date basis, new home sales are down in all four regions, falling 25.6% in the Northeast, 8.5% in the Midwest, 1.6% in the South and 4% in the West.