Housing Recovery Cooled In June With US New Home Sales Off 8.1%

 @MeaganKaym.clark@ibtimes.com on July 24 2014 10:41 AM
homesales
Newly constructed single family homes are shown for sale in San Diego, California March 25, 2013. Reuters

New home sales in the U.S. slowed in June after a leap in May, a sign that a housing recovery that's a bit more gradual than economists would like continues to be a sore spot in the economy.

Sales of new single-family homes fell 8.1 percent in June from May to a seasonally adjusted annual rate of 406,000 homes, the U.S. government reported Thursday. From June 2013, new home sales fell 11.5 percent.

"This was a dismal report," said Stephanie Carol, U.S. economist for IHS Global Insight. "Last month’s number looked like an outlier, and turned out to have been too good to be true."

In May, sales of new homes increased by 18.6 percent from April and 16.9 percent from the previous year to an annual rate of 442,000, revised down by the Commerce Department on Thursday from 504,000 homes.

The amount of new homes bought fell the most in the Northeast, by 20 percent, followed by declines in the Midwest (8.2 percent), South (9.5 percent) and West (1.9 percent).

Existing home sales increased 2.6 percent in June, reaching 5 million sales for the first time since October, the National Association of Realtors reported Tuesday. Home sales had improved in the middle of last year but began stumbling again over the past 12 months as prices and interest rates rose coupled with stagnant wage growth.

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