In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses new home sales.
- New home sales fell sharply in June to 350,000 from May. However, the figures for the prior two months were both revised upward and sales remain 15.1 percent stronger than in June of last year.
- The inventory of new homes inched up slightly to 144,000 from 143,000 a month earlier, but was down 15.9 percent from a year earlier. The bulk of the decline in inventory was in finished or under construction properties, while the inventory of properties for sale but not started rose, a pattern in line with strong permitting this spring. The decline in sales caused the months supply to rise from 4.5 months in May to 4.9 in June, which is below the 6.6 month figure from June of 2011.
- The median price eased from $240,200 to $232,600 over the 12-month period ending in June.
- New home sales will remain brisk as long as affordability remains strong and inventories of existing homes are low or not adequate for new home buyer tastes. However, new home sales are limited by the relatively low amount of completed inventory. Permitting has increased, but there is a lag in the supply chain that will take time to catch up. Still, demand is there, a good sign for the market.