Sales of new single-family houses jumped 13.8% in June, according to estimates released by the U.S. Census Bureau and Department of Housing and Urban Development. New-home sales were at a seasonally adjusted rate of 776,000 last month, above May’s revised rate of 682,000. Year over year, June’s sales were 6.9% higher than the June 2019 estimate of 726,000.
This news follows other strong residential market indicators for the month of June. Meyers Research reported this week that pending new-home sales reached an index high in June. And existing home sales rose 20.7% last month, according to the National Association of Realtors.
“Today’s new-home sales report from the Census Bureau showed a stronger-than-expected June number and upward revisions to May. The strong June number helped push new-home sales to average 676,000 in the second quarter, above our July forecast of 661,000,” said Fannie Mae chief economist Doug Duncan. “Sales were particularly strong in the Northeast during June as the coronavirus pandemic, which had hit the region particularly hard in early spring, abated. However, sales in the Northeast typically only account for around 5% of the country’s new-home sales, the majority of which are located in the South and West. The geographic path of the coronavirus and the regional outbreaks moving south and west across the country may pose a greater downside risk to new sales in the coming months.”
According to the data, the median sales price of new houses sold in June was $329,200, while the average sales price was $384,700.
The seasonally adjusted estimate for new homes for sale was 307,000 at the end of June, representing a 4.7-month supply at the current sales rate.
“Year-to-date sales were up 3.5% compared to 2019 as new-home sales played a major role in fulfilling high demand, while inventories of existing homes remained extremely tight. However, the supply of new homes for sale is starting to thin. In June, the months’ supply of new homes fell to 4.1 (not seasonally adjusted), representing the lowest inventory levels in seven years,” added Duncan. “Additionally, the number of new homes sold but not yet started jumped to 233,000 annualized, the second-highest level since the start of 2007. The ratio of new single-family home sales to single-family starts remained elevated in June, indicating that home builders will have to increase the pace of construction significantly to fulfill current orders and maintain a healthy sales pace.”