WASHINGTON — Sales of new homes fell for a third straight month in June, dropping by 6.6%. to the lowest level in more than a year.
The June sales decline left sales at a seasonally adjusted annual rate of 676,000, the Commerce Department reported today. That followed a 7.7% sales decline in May and a 10.1% fall in April.
The pace last month was down 19.4% from a year ago and the slowest since April 2020. Housing has been a stand-out performer since the economy began emerging from the steep but short pandemic recession in April last year.
The median price of a new home sold in May was $361,800, up 6.1% from a year ago. but down 5% from May, suggesting the surge in prices may be slowing a bit as builders increase inventories. The number of new homes for sale at the end of June increased to 353,000, up 7% from May.
A shortage of homes on the market and rising costs for material such as lumber and also higher labor costs had fueled a sharp jump in prices. But analysts said the trend for sales and price gains has clearly slowed from the red-hot pace seen over the past year as the economy emerged from the pandemic.
Rubeela Farooqi, chief U.S. economist at High Frequency Economics, noted that new home sales averaged 728,000 at an annual rate in the April-June quarter, down sharply from a monthly average of 926,000 in the fourth quarter of last year.
“The trend has clearly slowed,” she said. “Prices remain above pre-recession levels and are likely a factor weighing on demand for new homes.”
By region of the country, sales of new homes rose 5.7% in the Midwest in June but declined in the other three regions. Sales fell 27.9% in the Northeast and were down 7.8% in the South and 5.1% in the West.
The report on new homes followed news last week that sales of existing homes rose 1.4% in June to a seasonally adjusted annual rate of 5.86 million units with the median price of an existing home hitting a record high of $363,300, up 23.4% from a year ago.