New Home Sales Rebound in June Despite Affordability Concerns

New Home Sales Rebound

Sales of newly built, single-family homes increased in June to a seasonally adjusted annual rate of 646,000 units — a 7% rise from May’s downwardly revised reading — according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

On a year-to-date basis, new home sales in 2019 are 2.2% higher than the same period in 2018.

“Though there is a clear demand for new homes, builders continue to wrestle with affordability headwinds, including shortages of buildable lots and skilled labor, that are constraining sales,” said NAHB Chairman Greg Ugalde, a home builder and developer from Torrington, Conn.

“The June figures are in line with our forecast predicting a modest 3.5% growth in new home sales for 2019, due largely to affordability concerns,” said NAHB Economist Danushka Nanayakkara-Skillington.

A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the June reading of 646,000 units is the number of homes that would sell if this pace continued for the next 12 months.

The inventory of new homes for sale was 338,000 in June, representing a 6.3-month supply. The median sales price was $310,400, nearly identical to the $310,500 median price from a year earlier.

Regionally, and on a year-over-year basis, new home sales are 19.4% higher in the West and 9.5% higher in the South. Sales are down 50% in the Northeast and 17.6% in the Midwest.

Visit the Eye On Housing blog for more industry analysis.