By Olivia Rockeman | Bloomberg
Sales of new U.S. homes unexpectedly fell to their lowest level since April 2020 in June, showing a further weakening in demand against rising prices and tight supply.
Purchases of new single-family homes fell 6.6% to an annual pass of 676,000 to a downward revised 724,000 in May, government data showed on Monday. The average estimate in a Bloomberg survey among economists called for a rate of 796,000.
The rise in construction costs for everything from labor to transportation to wood has held back domestic buildings over the past few months, which has contributed to prices soaring while supply of homes has been curtailed. Some of the pressure on the supply chain may ease in the coming months, and timber prices have quickly retreated from their recent high.
Biden administration officials recently held a meeting with representatives of the housing industry, with the aim of addressing the shortage of housing and to alleviate the pressure that the rise in prices is helping.
The Department of Commerce report showed the median selling price of a new home rose 6.1% year-on-year to $ 361,800.
The report showed that the number of homes sold in June waiting for construction to begin – some backlogs – had fallen from a month earlier to 229,000. The total number of homes under construction sold, decreased to 289,000 in June.
There were 353,000 new homes for sale in June, the most since the end of 2008. At the same time, only 10% of the homes were already completed. No more than 100,000 were started.
At the current sales rate, the supply of new homes will take 6.3 months, compared to 5.5 months in the previous month.
A separate report last week showed that sales of previously owned homes rose for the first time in five months in June as home inventory improved slightly.
- Sales fell in three out of four in U.S. regions. Purchases fell by about 28% in the Northeast, by 7.8% in the South and by 5.1% in the West
- Purchases for new homes are about 10% of the market and are calculated when contracts are signed. It is considered a more timely barometer than the purchase of previously owned homes, which is calculated when contracts are concluded
- The data of the new houses is erratic; the report showed 90% confidence that the change in sales ranged from a decrease of 23.1% to an increase of 9.9%