A report released this morning by the U.S. Census Bureau showed that sales of new single-family homes in America rose by 0.8 percent in June to a seasonally adjusted annual rate of 610K units. That was in line with economists’ expectations but the prior month’s figure was revised slightly lower. Regionally, new home sales in June fell in the South (-6.1 percent), were flat in the Northeast, and rose in the Midwest (+10.0 percent) and the West (+12.5 percent).
The inventory of new single-family homes in June lifted to 272,000, and months’ supply rose to 5.4 based on the current sales pace. The median selling price of new houses sold in June was $310,800, a slight pullback from the all-time high hit in May. Overall this was an encouraging report but it is important to remember that new home sales are quite volatile, meaning that the longer-term trends are where the focus should be. Moreover, new home sales tend to head sharply lower ahead of a recession and fortunately this has yet to occur during the current business cycle.
Sources: Econoday, U.S. Census Bureau, ZH, FRBSLPost author: Charles Couch