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Economy in Brief

U.S. New Home Sales Strengthen Unexpectedly in June
by Tom Moeller  July 24, 2020

• New single-family home sales firmed for second month.

• Sales rose throughout the country.

• Prices strengthen to four-month high.

Sales of new single-family homes increased 13.8% (6.9% y/y) during June to 776,000 (AR) from 682,000 in May, revised up from 676,000. The increase followed May's 19.4% rise and left sales at the highest level since July 2007. The Action Economics Forecast Survey expected sales of 700,000 during June.

The rise in home sales occurred against the backdrop of a decline in the 30-year fixed-rate mortgage to an average 3.16% in June from 3.23% averaged in May. Rates have since fallen to an average 3.02% so far this month.

Sales in the Northeast rose 89.7% to 55,000 and have more-than-doubled y/y. Sales in the West strengthened 18.0% (4.1% y/y) to 203,000. Sales in the Midwest improved 10.5% (33.3% y/y) to 84,000 while sales in the South rose 7.2% (-1.8% y/y) to 434,000.

The median price of a new home increased 6.1% (5.6% y/y) to $329,200 in June while the average price of a new home improved 6.2% (6.3% y/y) to $384,700. Home prices, which are not seasonally adjusted, have been range-bound for the past few years.

The months' supply of new homes on the market declined sharply to 4.7 in June from May's 5.5 months. These figures remained down versus a recent high of 6.8 months in April. The median number of months a new home stayed on the market rose to 3.9, the longest since March 2018.

New home sales activity and prices are available in Haver's USECON database, while MBA loan applications can be found in SURVEYW. The consensus expectation figure from Action Economics is available in the AS1REPNA database.

U.S. New Single-Family Home Sales (SAAR, 000s) Jun May Apr Jun Y/Y % 2019 2018 2017
Total 776 682 571 6.9 685 614 616
  Northeast 55 29 22 111.5 30 32 40
  Midwest 84 76 77 33.3 72 75 72
  South 434 405 337 -1.8 400 347 341
  West 203 172 135 4.1 183 160 164
Median Price (NSA, $) 329,200 310,200 307,100 5.6 319,267 323,125 321,633
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