Sales of new homes in the United States cooled in June, according to government data released Wednesday, but the market remains squeezed by a lack of existing properties.
Sales of new single-family houses ticked down to an annual rate of 697,000, seasonally adjusted, the Commerce Department said in a statement.
This was in line with analyst expectations, but the figure was still elevated compared to earlier months. The latest number was slightly below May’s revised rate of 715,000.
From the same period a year ago, new home sales were 23.8 percent higher, and the median price edged down to $415,400.
The market for new homes is much smaller than that of existing homes, which makes up the vast majority in the country.
But a lack of inventory for existing homes has created additional demand for new properties in recent months, despite elevated mortgage rates.
While new home sales fell in June, the sales rate in the second quarter was significantly higher than the average in the first three months of the year, said Rubeela Farooqi, chief US economist at High Frequency Economics.
Analysts have cautioned, however, that the margins of error in new home sales data can be large.
“New home sales have risen 40 percent from their low last summer and prices are falling sharply, as homebuilders are offering steep discounts and temporary mortgage buydowns to keep sales ticking over,” said economists at Pantheon Macroeconomics in a recent report.
“This is in stark contrast to the existing home market, where sales are still bouncing around the cycle low and prices are trending sideways,” the analysts said.
