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VOL. 39 | NO. 30 | Friday, July 24, 2015

US new-home sales hit June slump

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WASHINGTON (AP) — Fewer Americans bought new homes in June, a possible sign that the real estate market might not be as hot as it appeared at the start of summer.

The Commerce Department said Friday that new-home sales slumped 6.8 percent last month to a seasonally adjusted annual rate of 482,000. The report also revised May sales down to a rate of 517,000 from 546,000.

The June slowdown indicates the potential limits of the earlier momentum. A nearly two-year hiring streak and low mortgage rates had been spurring stronger sales through much of the year. New-home purchases have vaulted up 21.2 percent through the first half of 2015, although the government sales report is volatile on a monthly basis.

Jennifer Lee, a senior economist at BMO Capital Markets, said the decline "poured cold water on the festive tones" from past reports of accelerating sales.

Some analysts downplayed the report as representing a sliver of the real estate market.

"While the June report is disappointing, new-home sales represents a small portion of total home sales (just 8 percent)," said Bricklin Dwyer, an analyst at the bank BNP Paribas.

But last month's slump could muddle expectations that the real estate sector will spur stronger economic growth in the coming months.

The median sales price has slipped 1.8 percent to $281,800 over the past 12 months. Buying fell in the Midwest, South and West, while rising sharply in the Northeast.

Supplies remain remarkably tight with few new listings coming onto the market and construction expanding at a slower pace than sales of new homes. That may be a sign that the current strength in the market could wane as would-be buyers become frustrated by their limited options.

There are 5.4 months' supply of new homes available, compared to six months in a healthy market. Construction of single-family houses has risen 9.1 percent year to date, less than half the pace of sales growth for new homes.

There are other reports that the housing sector carried its previous momentum through June.

Sales of existing homes increased 3.2 percent last month to a seasonally adjusted annual rate of 5.49 million, the National Association of Realtors said Wednesday. The shortage of new listings has fueled higher prices. The median home value has risen 6.5 percent over the past year to $236,400, the highest figure — not adjusted for inflation — documented by the Realtors.

Much of the additional demand has emerged from consistently solid hiring and low mortgage rates. Employers added 3.1 million jobs last year and are on pace to add 2.5 million jobs this year.

Borrowing costs are rising but have stayed low by historical standards.

The average 30-year fixed rate was 4.04 percent last week, according to the mortgage giant Freddie Mac. That average has increased from a 52-week low of 3.59 percent.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 0 0 0
MORTGAGES 0 0 0
FORECLOSURE NOTICES 0 0 0
BUILDING PERMITS 0 0 0
BANKRUPTCIES 0 0 0
BUSINESS LICENSES 0 0 0
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0