U.S. New Home Sales Rebound Much Less Than Expected In June

(RTTNews) - After reporting a steep drop by new home sales in the U.S. in the previous month, the Commerce Department released a report on Thursday showing a modest rebound by new home sales in the month of June.

The Commerce Department said new home sales rose by 0.6 percent to an annual rate of 627,000 in June after plummeting by 11.6 percent to a rate of 623,000 in May. Economists had expected new home sales to jump by 4.3 percent to a rate of 650,000.

"June new home sales were weaker than expected in June despite builder incentives aimed at encouraging sales," said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.

She added, "We think those incentives, including price cuts, will prevent a sharp decline in sales, but the May and June pace of sales suggests some downside risk to our forecast for a stronger pace of sales in the second half."

The rebound by new home sales came amid strength in the Midwest and South, where new home sales surged by 6.3 percent and 5.1 percent, respectively.

On the other hand, the report showed a 27.6 percent nosedive by new home sales in the Northeast and a 8.4 percent plunge by new home sales in the West.

The Commerce Department also said the estimate of new houses for sale at the end of June was 511,000, up 1.2 percent from 505,000 at the end of May and up 8.5 percent from 471,000 a year ago.

The estimate of new houses for sale represents 9.8 months of supply at the current sales rate, up from 9.7 months in May and up from 8.4 months in June 2024.

Meanwhile, the Commerce Department said the median sales price of new houses sold in June was $401,800, down 4.9 percent from $422,700 in May and down 2.9 percent from $414,000 in the same month last year.

A separate report released by the National Association of Realtors on Wednesday showed existing home sales in the U.S. pulled back by more than expected in the month of June.

NAR said existing home sales slumped by 2.7 percent to an annual rate of 3.93 million in June after jumping by 1.0 percent to a revised rate of 4.04 million in May.

Economists had expected existing home sales to fall by 0.5 percent to an annual rate of 4.01 million from the 4.03 million originally reported for the previous month.