The Census Bureau estimated new home sales for June at a seasonally adjusted annual rate of 610,000. This was close to expectations, but the previous three months were revised lower. Median price of a new home contracted in June was estimated at $310,800, roughly $10,800 lower than June of last year. The average price of a new home in June was $379,500. This was $15,200 higher than a year ago. With prices now at or above the previous cycle peak, new home builders will have to be creative to maintain sales volume growth.
A favorable interest rate environment continues to support new home sales…
A little perspective goes a long way. While new home sales have made a nice rebound, the real unadjusted numbers for June are still less than half of the previous record in June 2005 when there were 115,000 new homes sold. The 55,000 new home sales this year are up 5,000 from the 50,000 seen in 2016.
It will be interesting to see what the second half of the year looks like in terms of new home sales volume, particularly with the Fed talking about rate hikes and a normalization of their balance sheet “relatively soon”. For now, rates remain tempered
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