New Home Sales Reach Post-Recession High

New home sales rose to a post-recession high in June following a May drop, HUD and the Census Bureau reported yesterday.

The report said new single-family home sales in June rose by 3.5 percent to 592,000, seasonally adjusted. This compared to 572,000 (revised) in May and 586,000 in April (revised) and represented a 25.4 percent improvement from a year ago (472,000). 

“June’s solid report follows a string of positive data for the U.S. housing market,” said Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C. “Existing home sales reached a post-recession high in June, new home construction continues to edge higher and home builder sentiment has remained at a solid level.” 

Vitner said low mortgage rates and “favorable” residential credit conditions remain supportive for further sales gains. “The recent data are consistent with our forecast for continued modest improvement in the housing market this year,” he said.

HUD/Census reported the median sales price of new houses sold rose to $306,700 in June from $290,400 in May; the average sales price slipped $700 to $358,200.

The seasonally adjusted estimate of new houses for sale at the end of May rose remained at 244,000, representing a 4.9-month supply at the current sales rate, HUD/Census said. “Demand for homes is solid across much of the country and recent gains would likely have been even higher if not for the lack of homes available for sale,” Vitner noted.

Regionally, new home sales in the Northeast and Midwest saw the greatest strengthening, reporting a 64.7 percent and 17.5 percent year-to-date pickup. New home sales in the South and West rose a more modest 6.5 percent. 

Last week the National Association of Realtors reported that existing-home sales maintained their upward trajectory in June and increased for the fourth consecutive month.