The pace of new single-family home sales rose by only 0.8% to a slightly weaker-than-expected 610,000 seasonally adjusted annual rate in June, following downward revisions to the sales pace in the previous three months, data released by the Commerce Department Wednesday showed.
The sales pace was expected to rise further to 615,000, based on an MNI survey of economists.
The supply of new homes for sale rose by 1.1% to 272,000 in June. Housing starts rebounded sharply in June after three straight declines, suggesting supply could improve further in the coming months after some slowdown. Based on the movements in sales and supply in June, the months supply rose to 5.4 months from 5.3 months in May, and was up from 5.2 months a year ago.
With the increase in supply, the median sales price of new homes fell by 4.2% to $310,800 in June and was down 3.4% from June 2016, but remained fairly high.
Sales rose by 10.0% in the Midwest and by 12.5% in the West regions, slightly more than offsetting a 6.1% decline in the relatively large South region. Sales were unchanged in the Northeast.
New home sales in May were revised down to a 605,000 rate from the 610,000 rate previously reported, while April sales were revised down to a 577,000 rate from the 593,000 pace previously reported. March sales were revised down sharply to a 638,000 pace from the previously reported 644,000 rate.
The second quarter average sales pace of 597,000 was well below the 617,000 average pace in the first quarter after revisions were included, an indication that concerns about upward interest rate adjustments in the near future may have dissuaded some buyers. However, year-to-date sales, before seasonal adjustment, were still up 10.9% from the same six month period a year ago, with gains in all four regions.
