New-home sales fall to nine-month low while supply rises
Purchases of new homes unexpectedly dipped to the weakest pace in nine months as higher prices and mortgage rates sideline demand, adding to signs of a cooling in the housing market, government data showed Thursday.
Single-family home sales fell 1.7% month-over-month to a 627,000 annualized pace (the estimate was 645,000) after a 638,000 rate (revised from 631,000). The median sales price increased 1.8% year-over-year to $328,700. The supply of homes at the current sales rate rose to 5.9 months from 5.7 months; 309,000 homes for sale was the highest since 2009.
The first back-to-back decline since January was led by a 52.3% drop in the Northeast to 21,000 home sales, the fewest since 2015, as well as a 3.3% decline to 355,000 in the South, the biggest region. The West and Midwest recorded gains.
The figures follow data Wednesday showing sales of previously owned homes fell for a fourth month to the lowest since early 2016. A separate report on Thursday showed home prices rose 1.1% in the second quarter from the previous three months, the smallest gain in four years, according to the Federal Housing Finance Agency.
At the same time, a robust job market and higher take-home pay following tax cuts should keep demand for new homes stable. The number of properties sold but not yet under construction rose to 212,000, the highest since November, a sign builders will stay busy in coming months. In addition, 65,000 homes were for sale but not yet started, the most since 2008.
New-home sales, tabulated when contracts get signed, account for about 10% of the market. While volatile, they're considered a timelier barometer than purchases of previously owned homes, which are calculated when contracts close and are reported by the National Association of Realtors.
The Commerce Department said there was 90% confidence that the change in sales last month ranged from a 16.4% drop to a 13% increase, underscoring the volatility of the data. The report is released jointly by the Census Bureau and Department of Housing and Urban Development in Washington.