New-home sales miss estimates after downward revisions
Sales of new homes rose in June by less than forecast and purchases were revised lower in the three prior months, the latest sign of weakness for the housing sector.
Single-family home sales climbed 7% to a 646,000 annualized pace, the first gain in three months, government data showed Wednesday. The median sales price was little changed from a year earlier at $310,400.
The data suggest sales are still struggling to gain momentum despite low unemployment, solid wage gains and low mortgage rates. A shortage of affordable properties continues to weigh on buyers and constrain sales.
May new-home sales were revised to 604,000 from 626,000; March and April purchases were also revised lower.
Among other figures showing limited progress in the housing sector, the National Association of Realtors reported Tuesday that existing-home sales, which make up about 90% of the market, fell in June as the median selling price continued to increase. Government data showed new-home construction fell for a second month in June and permits to build dropped to a two-year low.
The number of properties sold for which construction hadn't yet started rose to 205,000, the highest since November 2017, indicating a pickup in builder backlogs.
The supply of homes at the current sales rate declined to 6.3 months from 6.7 months in May. The number of new homes for sale at the end of the month rose to 338,000 in June from 309,000 a year ago.
Purchases of new homes jumped in the West by the most since August 2010, while sales also rose in the South.
Sales in the Midwest slumped to 56,000 last month, the slowest pace since September 2015.
Economists in Bloomberg's survey projected a gain to a 658,000 pace, with forecasts ranging from 582,000 to 698,000.
The number of already completed homes for sale rose to the highest level since November 2010.
New-home purchases account for about 10% of the market and are calculated when contracts are signed. They are considered a timelier barometer than purchases of previously owned homes, which are calculated when contracts close.
The report is published jointly by the Census Bureau and Department of Housing and Urban Development.