New single-family home sales fell 6.6% in June to a 676,000 seasonally adjusted annual rate of 676,000, according to the latest Commerce Department monthly report. The June number 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% on a YoY.
Here’s the market breakdown:
– New-Home Sales: 676,000
– For-Sale Inventory: 353,000
– Months’ Supply: 6.3 months
– Median Price: $361,800
– Northeast: +19.5%
– Midwest: +23.9%
– South: +15.6%
– West: +4.1%
How the industry is responding:
“Sales continued to trend lower in June as some builders slow sales contracts to manage supply-chains, amidst longer delivery times and higher construction costs. While lumber prices have shown some improvement in spot markets, these declines take time to translate into lower construction costs. Moreover, other items like OSB remain elevated.” — National Association of Home Builders Chairman Chuck Fowke
“The June data came in lower than expected, and we anticipate an upward revision next month. Nonetheless, sales have trended lower as construction costs have increased and builders have sought to manage material delays and cost challenges in the construction pipeline, in addition to dealing with shortages of lots and labor in many housing markets.” — National Association of Home Builders Chief Economist Robert Dietz
“As we lap the one-year mark of housing’s post-pandemic recovery, new-home sales activity remains at a high level. The momentum is generally steadying at a pace that’s roughly on par with pre-pandemic rates, but lower than during the 2020 fall frenzy. Nevertheless, new-home prices remain high, with the median new-home sales price up 6% from this time last year.
“With existing homes scarce over the last 15 months, new homes have been a relatively more abundantly available option for homebuyers. As more existing home sellers return to the housing market, builders may have to compete with better-priced existing homes even as they navigate higher costs for the materials and labor needed to build homes. Builders are working through this uncertainty by managing their pipelines, notably expanding the number of homes for sale that are not yet started (+84% compared to last year). However, as the number of completed homes for sale still lags behind last year (-45%), new homes continue to sell quickly once completed (in just 3.5 months).” — realtor.com® Chief Economist Danielle Hale
“Today’s report also provides ample evidence of ongoing supply constraints continuing to hold back potential sales. The number of homes for sale but not yet started jumped 11.7% and, as a share of total homes for sale, hit the highest share on record at almost 30%. In contrast, homes for sale that are currently completed remained near the lowest level recorded since the start of the series in 1999. While today’s release will likely result in a downward revision to our near-term sales outlook, new-home sales are still expected to rebound somewhat as the recent pullback in lumber prices and likely loosening of the labor market leads to more home construction.” — Fannie Mae Chief Economist Doug Duncan