June New Home Sales Edge Up; Median Price Falls

Sales of new single-family houses in June rose modestly, although the median sales price fell as more home builders tried to bring less high-end housing on the market, HUD and the Census Bureau reported yesterday.

The report said new home sales came in at 610,000, seasonally adjusted annually, from a downwardly revised 605,000 units in May (last month, HUD/Census reported May sales at 610,000). From a year ago, sales came in 9.1 percent higher (559,000).

New home sales improved everywhere except the largest region, the South, where sales fell by 6.1 percent in June to 323,000 units from a nearly 10-month high in May (344,000). From a year ago, sales in the South improved by 0.9 percent.

In the West, sales rose by 12.5 percent to 180,000 units, seasonally adjusted, in June from 160,000 units in May and jumped by 33.4 percent from a year ago. In the Northeast, sales were unchanged at 41,000 units from May but improved by 41.4 percent from a year ago. In the Midwest, sales rose by 10 percent to 66,000 units in June from 60,000 units in May but fell by 12 percent from a year ago.

The report noted the median sales price of new houses sold in June fell to $310,800 from a revised $324,800 in May. The average sales price fell to $379,500 from $381,000.

Inventory rose slightly, to 272,000 units available at the end of June, compared to 269,000 in May, representing a supply of 5.4 months at the current rate.

“Sales are still constrained by lean inventories but entry-level buyers are increasingly opting for new homes, which is weighing on new home prices,” said Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C. “The West seems to be gaining momentum, reflecting some additional supply.”

Vitner said most of the increase in new home sales was for homes that had not been started yet.