Sales of new homes unexpectedly plunged in June, the third straight month of falling sales.
New home sales fell 6.6 percent in the month to a seasonally adjusted annual rate of 676,000 units, the Commerce Department reported Monday. That followed a 7.7 percent sales decline in May and a 10.1 percent decline in April.
Economists had forecast sales to rise 3.4 percent. The previous three months were also revised lower.
The median price of a new home sold in May was $361,800, up 6.1 percent from a year ago but the lowest since November.
A shortage of homes on the market and rising costs for materials such as lumber and also higher labor costs are fueling higher prices. This appears to be putting homes out of reach of some buyers.
Sales were down 27.9 percent in the Northeast, the smallest market for new homes, to 31,000. They fell 7.8 percent in the South, by far the largest market, to a seasonally adjusted annual rate of 367,000. Sales fell 5.1 percent in the West to 186,000. Sales climbed in the Midwest to
The seasonally‐adjusted estimate of new houses for sale at the end of June was 353,000, the highest in over a year. This represents a supply of 6.3 months at the current sales rate. This is also the highest in over a year. The normal range is between four to 6 months, so this is slightly above average. The all-time low was set during a three months period of last August through October when supply sat at just 3.5 months. Supply has been rising for four months now.
Mortgage rates have fallen sharply in July, which could spur more home buying.
The report on new homes followed news last week that sales of existing homes rose 1.4 percent in June to a seasonally adjusted annual rate of 5.86 million units with the median price of an existing home hitting a record high of $363,300, up 23.4 percent from a year ago.
–The Associated Press contributed to this report.