New home sales decreased in June, but slightly increased from last year, according to the new report from the Census Bureau and the Department of Housing and Urban Development.
“Today’s larger-than-expected monthly dip in new home sales does not diminish a steady string of year-over-year gains, although those year-over-year gains have steadily slowed over the first half of this year,” Zillow Senior Economist Aaron Terrazas said. “With existing home inventory so tight for so long, and prices rising so quickly, home builders clearly are responding to a market starved for new supply and buoyed by a strong labor market.”
Sales of new single-family houses decreased 5.3% to 631,000 in June, down from May’s 666,000 sales. This is 2.4% above the estimate of 616,000 sales in June 2017.
Although homebuilders should be optimistic about new home sales, Terrazas questions if sputtering permits in the first half of 2018 could possibly reflect growing homebuilder pessimism.
“The prices of land, labor and lumber continue to spike, and while builders have largely proven able so far to deliver homes at prices that are accessible to many buyers, buyers will ultimately bear the brunt of those rising builder costs,” Terrazas added. “As strong as new home sales have been over the past year, it’s not obvious that momentum will be able to resist the powerful gravitational pull of costs over the next 12 months.”
The median sales price of new homes sold decreased to $301,00, The average sales price was $363,300.
The seasonally adjusted estimate of new homes for sale by the end of the month is 301,000 in June. This represents a supply of 5.7 months at the current sales rate.
Although new home sales saw an increase, existing home sales decreased for the third consecutive month in June, according to the latest report from the National Association of Realtors.