Pace of new-home sales suggests steady housing strength

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The housing market is stabilizing near 10-year highs, according to government data Wednesday that showed sales of new homes were slightly less than forecast.

Single-family home sales increased 0.8% month-to-month to a 610,000 annualized pace (the estimate was 615,000). The median sales price fell 3.4% year-to-year to $310,800. The supply of homes crept up to 5.4 months from 5.3 months and 272,000 new houses were on market at the end of June.

Americans, taking advantage of low mortgage rates and confident in a strong job market that’s providing steady wage gains, are still on the hunt for new homes. Prices fell from a year earlier as more moderately priced homes sold in June.

There were signs of progress on housing inventories, which were the highest since June 2009. The industry says it is still grappling with a lack of skilled workers and a limited number of plots to begin construction.

June demand reflected a 12.5% increase in the West and a 10% gain the Midwest. The May reading was revised to a 605,000 pace from a previously estimated 615,000.

The Commerce Department said there was 90% confidence that the change in sales last month ranged from an 11.3% drop to a 12.9% gain, underscoring the volatility of the data.

Bloomberg News