June 2017 New Home Sales

Sales of new homes improved slightly in June 2017 according to data from the Census Bureau.  Signed contracts totaled 610,000 on an annualized basis, an uptick of 5,000 compared to May’s downwardly revised tally (originally 610,000 as well).  Additionally, the year-over-year figure improved to 9.1 percent from 8.0 percent a month earlier, so the upward trend appears to be firmly in place. 

Despite an overall positive trend, regional data were mixed in the period.  Northeast transactions matched the previous month’s count of 44,000 units.  Midwest sales jumped 10 percent to 66,000 while completed contracts in the West increased 12.5 percent to 180,000.  However, the largest region of the nation experienced a decline as transactions in the South fell 6.1 percent to 323,000. 

Inventory measures increased marginally.  There were 272,000 new homes for sale in the period, up from 269,000 in May.  At the current transaction pace, the stock of homes would be depleted in 5.4 months if no other units were created, an increase from 5.3 the month before. 

Prices proxies suffered losses in June.  The average home’s price dropped to $379,500 from $381,400 in May.  Falling to $310,800 from $324,300 in the prior period, the median price suffered a more substantial decline.

One of the most interesting points within this release is the quarterly slowdown.  Even though the total is near the cycle highs, transaction volume dropped in the period from April through June when compared to the first three months of this year.  While new home sales do not represent a large enough segment of the economy to ruin tomorrow’s report on gross domestic product (GDP), it could be a drag on the overall total.  Look for more on Atlas’ perspective regarding the nation’s output growth in the days ahead.