New Home Sales Increased In June, But Lack Of Inventory Is Still A Concern

Posted by Patrick Barnard on July 26, 2017 No Comments
Categories : Residential Mortgage

New home sales were at a seasonally adjusted annual rate of about 610,000 in June, an increase of 0.8% compared with a revised rate of about 605,000 in May and an increase of 9.1% compared with about 559,000 in June 2016, according to estimates released by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.

The median sales price of new home sold in June was $310,800. The average sales price was $379,500.

As of the end of June there were about 272,000 new homes available for sale – about a 5.4-month supply at the current sales rate.

The increase is welcome news for mortgage lenders, who have been concerned about a lack of inventory during the past year or two, despite the fact that demand for housing is strong. Although new home sales have generally been increasing, month over month, so far this year, they saw a significant drop of 11.4% in April compared with March.

Earlier this week the National Association of Realtors reported that existing-home sales were at a seasonally adjusted annual rate of 5.52 million in June, a decrease of 1.8% compared with about 5.62 million in May.

Lawrence Yun, chief economist for NAR, says the slowdown was once again due to a lack of inventory. Total inventory of existing homes as of the end of June was about 1.96 million, a decrease of 0.5% compared with May and a decrease of 7.1% compared with June 2016.

That’s about a 4.3-month supply at the current sales pace, down from 4.6 months a year ago, according to NAR.

Total inventory has now fallen on year-over-year basis for the past 25 consecutive months, NAR said in its report. The lack of inventory is particularly impacting first-time home buyers, who represented about 32% of existing-home sales in June.

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