US new home sales for June declined 8.1% month-over-month to a seasonally adjusted annual rate of 590,000 units (consensus 670,000) from a downwardly revised 642,000 (from 696,000) in May. On a year-over-year basis, new home sales were down 17.4%. New home sales were the weakest in the South and West, the two largest regions as higher mortgage rates and higher prices pressured affordability even more for prospective buyers.
US new home sales for June 2022
- New home sales fell 8.1% month-over-month in June to a seasonally adjusted annual rate of 590,000 units (consensus 670,000) from a downwardly revised 642,000 (from 696,000) in May.
- On a year-over-year basis, new home sales were down 17.4%.
- The median sales price increased 7.4% yr/yr to $402,400 while the average sales price jumped 5.8% to $456,800.
- At the current sales pace, the supply of new homes for sale stood at 9.3 months, versus 8.4 months in May and 5.8 months in June 2021. A six-month supply is typically associated with a more balanced market.
- The percentage of new homes sold for $399,999 or less accounted for 50% of new homes sold versus 40% in May and 46% one year ago.
New home sales month-over-month/year-over-year by region:
- Northeast (-5.3%/-37.9%)
- Midwest (+42.3%/-22.1%)
- South (-2.0%/-8.7%)
- West (-36.7%/-32.9%)
Note new home sales in the West (which has the highest concentration of higher-priced homes) were down 36.7% month-over-month.
The report confirms the effect of rates and new home sales remain concentrated in higher-priced homes, as inflation pressures, pushed by supply constraints and labor shortages, are curtailing the building of lower-priced homes and pinching affordability for lower-income buyers.
Existing home sales account for 90% of US transactions and are calculated on a contract close basis. New home sales account for the remaining 10% and are based on contract signings.
The big question is after the surge in rates and slash in rates how much damage has been done with the massive wealth erosion.
Source: Census.gov
From The TradersCommunity News Desk