WASHINGTON: Sales of new US homes rose last month but the gains were softer than expected, continuing a streak of weakness in the American housing sector, according to government data released Wednesday.
The uptick in sales of new single-family homes in June reversed two months of declines, but sales in May were lower than initially reported.
But added to new data showing sales of existing homes have also lagged, the sluggish housing sector worries some economists, since low unemployment and enticingly low mortgage rates have not encouraged more would-be homeowners to sign on the dotted line.
New home sales in June rose seven percent from May to an annual rate of 646,000, seasonally adjusted, undershooting economists’ expectations.
But that was 4.5 percent above the sales pace of June 2018.
The numbers can be volatile and officials warn trends take four months to appear.
Still a slow housing market can be a sign of weaker economic activity and dampen a host of other categories, such as furniture and home appliance sales, which can weigh on calculations of GDP.
The median price for a new house rose 5.9 percent to $310,400, a rebound from May but still below April. Average prices fell, however, suggesting weakening demand for luxury homes.
Inventories remained largely unchanged with 338,000 new homes on the market at the end of June, representing a supply of 6.3 months at the current sales pace.
In the far larger market for existing homes, activity was also surprisingly weak last month even as the sales price hit a new record, according to private survey data released Tuesday.
Ian Shepherdson of Pantheon Macroeconomics said mortgage applications now suggest sales could rise in the latter half of 2019.
He said “new home sales are running a bit below the pace implied by mortgage demand, but the gap is small. We expect stronger sales over the second half.”