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New-home sales fall for third consecutive month
In June, new-home sales fell 6.6 percent from May's downwardly revised rate of 724,000 annualized units. NAFCU's Curt Long analyzes the data in a new Macro Data Flash report.
"New home sales fell for the third month in a row as construction struggles to contend with demand and high construction costs," said Long, NAFCU’s chief economist and vice president of research.
"Construction is pushed to its limits with increased costs, supply challenges, and an inability to keep up with the current number of projects, resulting in homebuilders putting projects on hold," he added. "New homes listed for sale reached a post-recession high of 252,000 annualized units, but the share of new home inventory that has been completed fell to an all-time low of 9 percent, compared to 25 percent before the onset of the pandemic. There are also reports that builders are keeping homes in inventory to ensure that the latest softening in demand holds."
Sales rose in one region in June, with the Midwest rising 5.7 percent. The volatile Northeast fell 27.9 percent, followed by the South (-7.8 percent) and the West (-5.1 percent). Compared to a year ago, sales rose in one census region, but those numbers are still skewed by the collapse and snap back of housing sales this time last year in response to the coronavirus pandemic lockdowns.
Based on current month sales, there were 6.3 months of supply in June, up 0.8 months from May. The number of unsold homes left on the market was up to 353,000 units representing a 17.3 percent increase from year-ago inventory levels.
The median new-home price, non-seasonally adjusted, declined from $380,700 in May to $361,800 in June.
"NAFCU expects new home sales to remain constrained by supply and pricing, even though economic outlook is generally good," concluded Long.
For more economic updates from NAFCU's award-winning research team, view all of NAFCU's Macro Data Flash reports.