Sales of New Homes Free-Fall Nearly Ten Percent in June

Sales of newly built, single-family homes slowed 8.4 percent to a seasonally adjusted annual rate of 350,000 units in June following an upwardly revised, strong pace in the previous month, according to figures released by the U.S. Department of Housing & Urban Development (HUD) and the U.S. Census Bureau. "While we would have liked to see a third consecutive month of new-home sales gains in June, the fact remains that the sales numbers are up on both a quarterly and yearly basis, while builders continue to report that they are seeing more serious buyers in the market for a newly constructed home with all of the latest updates," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. On a regional basis, new-home sales gained 14.6 percent in the Midwest and 2.1 percent in the West, but fell 8.6 percent in the South and 60 percent in the Northeast in June. Meanwhile, the inventory of new homes for sale was virtually unchanged for the month at 144,000 units, which represents a relatively slim, 4.9-month supply at the current sales pace. "The lower number of new-home sales in June represents an adjustment from a robust level of activity in May, yet overall results for the second quarter show we are still on track for continued improvement," said NAHB Chief Economist David Crowe. "That said, the very tight inventory of new homes for sale at this time poses a challenge to builders, who'd like to have a larger selection for buyers to choose from but continue to confront issues with obtaining credit to build viable new projects."