New house sales turned sharply lower last month, and home builders blame escalating trade tensions for the weak showing. Still, sales in the Northeast soared.
The sale of
newly constructed single-family homes worked out to 57,000 units during June, according to data jointly reported Wednesday by the Census Bureau and the Department of Housing and Urban Development.
Including the most-recent activity, historical data indicate there have been 349,000 new houses that have been sold from Jan. 1 through the mid-point of this year.
With seasonal adjustments applied,
last month’s annual rate of new home sales was 631,000. Volume tumbled by more than 5 percent compared to the downwardly revised rate for May.
Randy Noel, chairman of the National Association of Home Builders, blamed the poor showing on uncertainty resulting from previously announced lumber tariffs, another upcoming round of tariffs and talk of trade wars.
LendingTree Chief Economist
Tendayi Kapfidze noted in a written statement that the three-month average for new home sales, which balances timeliness with information value, is at its weakest level since February.
But despite the month-over-month weakness, a more than 2 percent gain was made over the upwardly revised rate for June 2017.
NAHB Chief Economist Robert Dietz had a more upbeat assessment of the latest numbers..
“Though this is the lowest monthly annualized sales pace since October 2017, new home sales for the first half of 2018 are up 6.9 percent on a year-to-date basis compared to last year,” Dietz stated.
“This indicates solid demand for new home construction.”
Also optimistic was Tian Liu, the chief economist for
Genworth Mortgage Insurance, who noted in a written statement that despite the challenges facing home builders, “the big picture for new home sales is very favorable.”
Last month’s newly built home sales were a seasonally adjusted rate of 71,000 in the Midwest, slowing from
a month earlier by 13 percent — the most of any region. The South declined 8 percent to 361,000, and there was a 5 percent reduction in the West to 147,000.
But new home sales in the Northeast soared 37 percent to a seasonally adjusted annual rate of 52,000.
The report indicated there were a seasonally adjusted 301,000 new homes for sale at the end of June 2018 — the most since there were 311,000 in March 2009. That worked out to a 5.7-month supply — the biggest supply since August 2017.
The median sales price was $302,100, and the average price was $363,300.