Steel Markets

Sales of New Homes Decline in July After Upward Revision for June

August 23, 2019

New home sales fell 12.8 percent to a seasonally adjusted annual rate of 635,000 from June’s revised rate of 728,000, acccording to the latest report from Commerce. Sales increased 4.3 percent from a year ago and were 4.1 percent higher on a year-to-date basis.

The revision to sales was notable due to the upward rise from the 646,000 rate initially posted in June, said National Association of Home Builders Chief Economist Robert Dietz.

“Industry surveys of builders suggested that June sales were stronger than initially estimated, and July sales improved off that base. As a result, we expect a revision to the July Census estimate as well,” said Dietz.

The median price of a new home sold in July was $312,800 and the average sales price was $388,000.

Regionally the Northeast saw sales jump 50 percent from June sales, but double-digit declines were recorded in the Midwest, South and West. For the first seven months of 2019, new home sales compared to year-ago levels were up 7.2 percent in the South, 9.5 percent in the West, and down 12.4 percent in the Midwest and 15.4 percent in the Northeast.

Inventory in July was 7.3 percent higher than a year ago at a level of 337,000 single-family homes for sale. At the current sales rate, inventory is at a 6.4-month supply. The supply is near normal levels, but June’s supply level was revised downward to 5.5 months.

“New home sales are performing better than single-family permits (-4.7% year-to-date change), as lower rates and price incentives boosted demand in recent months,” said Dietz. “The general rising trend for new home sales, after the housing affordability crunch of 2018, suggests additional permit growth in the second half of 2019.”

“We expect the volume of new home sales to continue to expand along the current modest pace, subject to monthly volatility and supply-side cost concerns,” added Dietz.