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New home sales hit two-year low in June
New home sales fell 8.1 percent in June to 590,00 annualized units, a two-year low. May was revised down 54,000 units. Compared to last year, June sales were down 17.4 percent. NAFCU Chief Economist and Vice President of Research Curt Long analyzes the data in the latest Macro Data Flash report.
“The gauge of prospective buyer traffic fell below the break-even level of 50 for a second straight month,” said Long. “With the drop in sales levels, supply has begun to outpace demand.”
Based on current month sales, there were 9.3 months of supply in June – a 0.9 month increase from May. The number of unsold homes left on the market increased by 18,000 to 463,000, a 32.3 percent increase from inventory levels a year ago.
New home sales varied by Census region. Sales in the West decreased by 36.7 percent in June, the largest of any region. The Northeast and South regions saw moderate declines of just 5.3 percent and 2 percent, respectively. The Midwest was the only region to see a rise in sales, increasing 42.3 percent. The median new home sales price also dropped 9.5 percent to $402,400.
“Additionally, according to Redfin, 14.9 percent of home-purchase agreements fell through in June,” added Long. “Outside of the first months of the pandemic, that cancellation rate is the highest percentage on record since Redfin began tracking cancellations in 2017.”
However, Long notes that NAFCU expects the housing market to steady itself despite the downturn, since 30-year mortgage rates are steadying, and the labor market remains strong.
For more economic updates from NAFCU's award-winning research team, view all of NAFCU's Macro Data Flash reports.