New home sales fall in June
Washington, DC – Sales of newly built single-family homes fell 6.6% in June to 676,000 seasonally adjusted annual figures, according to recently released data from the US Department of Housing and Urban Development and the US Census Bureau. The June figure follows downward revisions to the May estimate and marks the lowest rate since April 2020. Despite the recent cooling trend, new home sales are up 13.5% year on year, according to the National Association of Home Builders (NAHB). ).
“Sales continued to decline in June as some builders delay sales contracts to manage supply chains amid longer delivery times and higher construction costs,” said Chuck Fowke, president of NAHB. “While wood prices in the spot markets have shown some improvement, it will take some time for these declines to translate into lower construction costs. Additionally, other items such as OSB remain elevated.”
NAHB’s chief economist, JRobert Dietz, added: “June data came in lower than expected and we expect an upward revision next month. Nevertheless, sales have fallen as construction costs have risen and builders have tried to manage material delays and cost challenges in the construction pipeline, in addition to addressing lot and labor shortages in many housing markets.
A new home sale occurs when a sales contract is signed or a deposit is accepted. The house can be in any construction phase: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the June reading of 676,000 units is the number of homes that would be sold if this pace continued over the next 12 months.
The stock rose slightly, but remains low with a supply of 6.3 months, with 353,000 new single-family homes for sale, 46.5% higher than in June 2020. The stock of homes for sale, but construction has not yet started , rose 84% year-on-year, a clear sign of supply-side constraints in the construction market. In contrast, the completed turnkey inventory fell 44% year-over-year to just 36,000 homes.
The median selling price was $361,800, up 6% from the $341,100 median selling price posted a year earlier.
Regionally, year-over-year, new home sales increased in all four regions, up 19.5% in the Northeast, 23.9% in the Midwest, 15.6% in the South and 4.1% in the West. These significant increases are partly due to lower sales volume during the Covid crisis a year ago.