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News » US » Sales of new homes drop » published 27 Jul 2018

Sales of new homes drop

June saw a 5% fall in sales of new homes according to latest data from the US Department of Housing & Urban Development and the US Census Bureau, though numbers are still up on last year.

Sales of newly built, single-family homes fell to a seasonally adjusted annual rate of 631,000 units after a downwardly revised May report.

“Uncertainty caused by tariffs and the talk of trade wars are making home buyers more cautious, and builders are taking note of this situation,” said Randy Noel, chairman of the National Association of Home Builders (NAHB). “Not only are consumers and builders concerned about the current lumber tariffs, but also the next round of proposed tariffs on a number of goods and services.”

“Though this is the lowest monthly annualized sales pace since October 2017, new home sales for the first half of 2018 are up 6.9 percent on a year-to-date basis compared to last year,” said NAHB chief economist Robert Dietz. “This indicates solid demand for new home construction.”

A new home sale is deemed to occur when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the June reading of 631,000 units is the number of homes that would sell if this pace continued for the next 12 months.

The inventory of new homes for sale was 301,000 in June, which is a 5.7-month supply at the current sales pace. The median sales price was US$302,100.

Regionally, new home sales rose 36.8% in the Northeast. Sales fell 13.4% in the Midwest, 7.7% in the South and 5.2% in the West.

 

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This article was published on 27 Jul 2018 (last updated on 27 Jul 2018).

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