by However, sales edged up .6% from May, offering a glimmer of hope for summer sales activity
WASHINGTON — Sales of newly built homes declined from June 2024, according to recently released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
Sales of new single family homes totaled 627,000, 6.6% below the 671,000 reported in June 2024, but up .6% from 623,000 reported in May.
The report also noted that the median sales price of new houses sold in June was $401,800, which was 2.9% below the June 2024 price of $414,700 and 2.5% below $422,700 in May. The average sale price of new homes sold in June was $501,000, 1.1% above the June 2024 price of $495,500 and 2% below $511,500 in May.
The National Association of Home Builders said June and May saw the slowest sales since October of last year, as mortgage rates have been more than 6.8% in June.
Buddy Hughes, chairman of the National Association of Home Builders and a home builder from Lexington, North Carolina, said new home sales have remained flat, “highlighting persistent weakness in the housing market despite seasonal expectations for growth. Elevated mortgage rates and sustained price levels continue to limit purchasing power, particularly among first-time and middle-income buyers.”
The government report went on to note that the seasonally adjusted estimated number of new houses up for sale by late June was 511,000, up 8.5% above 471,000 in June 2024 and 1.2% above 505,000 in May. Representing a 9.8-month supply at the current sales rate, the June new home supply was 16.7% above the June 2024 estimate of 8.4 months and 1% above the May estimate of 9.7 months.
Contrast this with June existing home sales, which were level with June 2024 but down 2.7% from May, according to the National Association of Realtors. The median home price was $441,500, up 2% from June 2024.
In June, the NAR reported, there also was a .6% decline in inventory from May, totaling 1.53 million units, or a 4.7-month supply. Inventory was up 15.9% from June 2024, when there were 1.32 million units on the market.
The numbers in each case indicate that there are plenty of available homes for buyers of all age groups and demographics. However, the purchasing power of new or first-time buyers remains limited, as Hughes notes in his comments. That also limits spending for furniture, particularly among younger consumers looking to get married and start families.
As we’ve reported previously, builders are hoping to boost the numbers moving forward with incentives that aim to lower the price of new construction, as evidenced by the median price of new homes sold in May and June.
Yet even those efforts are not creating immediate results, officials note. According to the NAHB, new home sales are down year to date in all four regions, declining 25.6% in the Northeast, 8.5% in the Midwest, 1.6% in the South and 4% in the West.
“Despite targeted incentives and pricing adjustments by builders, demand remains tepid, suggesting these measures have had limited impact on overall sales volume,” noted Danushka Nanayakkara-Skillington, NAHB assistant vice president of forecasting and analysis, who added, “And while inventory conditions have stabilized, the flat performance signals continued buyer hesitation and a cautious outlook for the sector. Unless there is a material improvement in financing conditions, or household income growth, a near-term acceleration in new home sales appears unlikely.”
Of late, we’ve heard that many furniture retailers are struggling, despite an overall increase in year-over-year furniture store sales since September. Unfortunately, the housing data is one reason we can easily believe what they say is true.
