New home sales drop to 8-month low
Sales of new homes in June fell 5.3% to a seasonally adjusted annual rate of 631,000, the lowest level since October 2017, the Commerce Department reported today.
New home sales had risen 6.9% this year. The latest figures are also 2.4% above the June 2017 estimate of 616,000. 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.
Regionally, the Northeast saw the biggest growth with sales surging 36.8% last month. But new home sales fell 7.7% in South, dropped 5.2% in the West, and saw the biggest decline in the West with a 13.4% drop-off.
The median new house price fell 4.2% to $302,100 in June from a year ago. The average sales price was $363,300.
Last month there were 301,000 new homes in the market, up 1.7% from May. This represents a 5.7-month supply at the current sales rate. The supply is a little more than half of the level of homes reached during the housing market’s boom in 2006.
In response to June sales numbers, NAHB Chairman Randy Noel pointed to tariffs and a possible trade war as a catalyst for the decline.
“Uncertainty caused by tariffs and the talk of trade wars are making home buyers more cautious, and builders are taking note of this situation,” said Noel, a custom home builder from LaPlace, La. “Not only are consumers and builders concerned about the current lumber tariffs, but also the next round of proposed tariffs on a number of goods and services.”
NAHB Chief Economist said that while this is the lowest annualized sales pace since October of last year, the silver lining is the 6.9% increase in year-to-date sales compared to last year.
“This indicates solid demand for new home construction,” Dietz said.
New home sales had risen 6.9% this year. The latest figures are also 2.4% above the June 2017 estimate of 616,000. 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.
Regionally, the Northeast saw the biggest growth with sales surging 36.8% last month. But new home sales fell 7.7% in South, dropped 5.2% in the West, and saw the biggest decline in the West with a 13.4% drop-off.
The median new house price fell 4.2% to $302,100 in June from a year ago. The average sales price was $363,300.
Last month there were 301,000 new homes in the market, up 1.7% from May. This represents a 5.7-month supply at the current sales rate. The supply is a little more than half of the level of homes reached during the housing market’s boom in 2006.
In response to June sales numbers, NAHB Chairman Randy Noel pointed to tariffs and a possible trade war as a catalyst for the decline.
“Uncertainty caused by tariffs and the talk of trade wars are making home buyers more cautious, and builders are taking note of this situation,” said Noel, a custom home builder from LaPlace, La. “Not only are consumers and builders concerned about the current lumber tariffs, but also the next round of proposed tariffs on a number of goods and services.”
NAHB Chief Economist said that while this is the lowest annualized sales pace since October of last year, the silver lining is the 6.9% increase in year-to-date sales compared to last year.
“This indicates solid demand for new home construction,” Dietz said.