Sales of new single-family homes fell a dramatic 8.1% in June, compared to May, and were down 11.5% compared to June 2013, according to estimates released jointly by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD).
The seasonally adjusted annual rate of new home sales in June was 406,000, compared to 442,000 the previous month. The figures include a downward adjustment to the new home sales recorded in May.
The median sales price of new houses sold in June was $273,500; the average sales price was $331,400. About 197,000 new houses were for sale at the end of June, representing a 5.8-month supply at the current sales rate.
Part of the problem is that builders aren't constructing enough new homes to meet demand. The Census Bureau and HUD reported earlier this month nationwide housing production fell 9.3% to a seasonally adjusted annual rate of 893,000 units in June, due mainly to a nearly 30% decline in the South. All other regions posted monthly gains.
Single-family housing starts fell 9% to a seasonally adjusted annual rate of 575,000 units in June, while multifamily production fell 9.9% to 318,000 units.
The lack of available inventory is, in part, hurting new home sales.
Still, the National Association of Home Builders reported earlier this month that home builder confidence is up, having reached a score of 53 on the NAHB/Wells Fargo Housing Market Index, which measures builder confidence in the market for newly built, single-family homes.
‘This is the first time that builder confidence has been above 50 since January and an important sign that it is strengthening as pent-up demand brings more buyers into the marketplace,’ said Kevin Kelly, chairman of the NAHB, in a statement.
‘An improving job market goes hand-in-hand with a rise in builder confidence,’ added David Crowe, chief economist for the NAHB. ‘As employment increases and those with jobs feel more secure about their own economic situation, they are more likely to feel comfortable about buying a home.’
Meanwhile, the National Association of Realtors (NAR) reported earlier this week that sales of existing homes increased 2.6% to a seasonally adjusted annual rate of 5.04 million in June from an upwardly revised 4.91 million in May.
It was the first month since October 2013 that the annual pace of home sales reached 5 million, according to NAR. Still, existing-home sales were 2.3% below the rate recorded one year ago.