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New home sales improved modestly in June

0 24 Economic

by The Associated Press

WASHINGTON — U.S. sales of new homes perked up slightly in June, a sign that more would-be buyers are seeking newly built properties.
New home sales improved modestly in June

The Commerce Department said July 26 that new-home sales edged up 0.8 per cent to a seasonally adjusted annual rate of 610,000. Sales have registered a healthy 10.9 per cent increase so far this year.

The gains come amid a broader shortage of homes listed for sale, likely pushing more buyers into new construction. Despite steady growth since the housing bubble began to burst a decade ago, sales of new homes remain below historic averages. Builders are contending with a lack of land for construction, a shortage of workers and rising costs for some materials.

Sales last month advanced in the Midwest and West, but purchases were unchanged in the Northeast and dropped in the South.

The June sales report indicates that the price and supply pressures will continue.

The median sales price of a new home fell 3.3 per cent to $310,800. But the median obscures the overall trend of new construction toward more expensive homes. Just 13 per cent of new homes sold last month cost less than $200,000, compared to the 17 per cent for all of 2016 and 19 per cent for 2015.

There have been sales gains in the price range of $200,000 and $299,000 that overlaps with the median price for existing homes. But new homes that cost more than $500,000 are also a growing share of sales.

There were 272,000 new homes on the market in June, the most since June 2009.

But that accounts for only 5.4 months' supply based on the current sales rate. The gain in new-home inventory has been insufficient to offset the declines in sales listings of existing homes.

The National Association of Realtors said this week that there were 1.96 million existing homes for sale in June, a 7.1 decline from a year ago.

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