Property data records released by the U.S. Census Bureau and the Department of Housing and Urban Development indicate new-home sales fell in the month of June.
According to the official figures, sales of new, single-family unites decreased nearly 8.5 percent on a seasonally adjusted, annualized basis, totaling 350,000 units altogether.
Barry Rutenberg, National Association of Home Builders, indicated that despite the slide, construction firms are finding that more people are entering the homebuying market.
"“While we would have liked to see a third consecutive month of new-home sales gains in June, the fact remains that the sales numbers are up on both a quarterly and yearly basis, while builders continue to report that they are seeing more serious buyers in the market for a newly constructed home with all of the latest updates," said Rutenberg.
These buyers may be driven by the fact that mortgage records continue to be set on what seems like a weekly basis. Freddie Mac recently reported in its weekly Primary Mortgage Market Survey that 30-year fixed-rate mortgages fell to 3.4 percent for the week ending July 26. A year ago at this time, 30-year FRMs averaged more than 4.5 percent. The last time average mortgage rates were above 4 percent was in late March.
Meanwhile, as rates have fallen, new-home sales have varied at the regional level. The Commerce Department said that sales activity soared nearly 15 percent in the Midwest and 2.1 percent in the West. Home purchases in the South declined just over 8.5 percent, however, and a 60 percent drop in the Northeast.
The inventory of new homes remained about where it was in May, averaging 144,000 units. At the current sales pace, that represents a supply of around five months.
David Crowe, chief economist at NAHB, noted that the real estate market has been rather volatile for much of the past year, with more positives than negatives both for borrowers and professionals in the real estate sector.
“The lower number of new-home sales in June represents an adjustment from a robust level of activity in May, yet overall results for the second quarter show we are still on track for continued improvement," said Crowe. "That said, the very tight inventory of new homes for sale at this time poses a challenge to builders, who’d like to have a larger selection for buyers to choose from but continue to confront issues with obtaining credit to build viable new projects."