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.
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The new home sales report tends to be volatile because of its small sample size.
After last month’s positive new home results, some economists warned that tight housing inventory could slow the rising sales.
Prices for U.S. government debt rose after the data and the dollar pared gains against a basket of currencies. Aided by a almost two-year hiring streak and low mortgage rates, sales of new homes have vaulted up 24 percent through the first five months of the year.
At a level of 482k, the new home sale industry is still basically in a recession as the 35 year average is 685k and we’re still 65% below its ’05 bubble peak.
That average has increased from a 52-week low of 3.59 percent. In the South, sales slipped 4.1 percent.
There are 5.4 months’ supply of new homes available, compared to six months in a healthy market.
At June’s sales pace it would take 5.4 months to clear the supply of houses on the market, the most since last November. That’s a.5% month-over-month increase, but a 1.8% decline year-over-year.
Construction of single-family houses has risen 9.1 percent year to date, less than half the pace of sales growth for new homes.
There are other reports that the housing sector carried its previous momentum through June.
The index’s flash output component rose to 55.4 from the final June reading of 53.9.
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It is the lowest level since last November.
