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Economy in Brief

U.S. New Home Sales & Prices Decline Sharply in June
by Tom Moeller  June 26, 2022

• Home sales fall to lowest level since April 2000.

• Sales decline in most of country.

• Median sales price falls for second straight month.

The housing market remains under pressure. New single-family home sales during June declined 8.1% (-17.4% y/y) to 590,000 (AR) after rising to 642,000 during May, revised from 696,000. It was the lowest sales level since April 2020. The Action Economics Forecast Survey expected 664,000 sales in June.

A 36.7% decline (-32.9% y/y) in sales in the West to 112,000 last month led the sales weakness as it followed a 24.6% May rise. Sales have fallen 53.7% since December 2021. Sales in the Northeast weakened 5.3% last month (-37.9% y/y) to 18,000, off 64.7% in the last three months. Sales in the South eased 2.0% (-8.7% y/y) to 386,000 after rising 11.6% in May. Offsetting these declines, sales in the Midwest rose 42.3% in June (-22.1% y/y) to 74,000, the highest level in three months.

Lower prices accompanied the sales decline last month. The median price of a new home in June declined 9.5% (+7.4% y/y) to $402,400 following a 2.7% May weakening. The average sales price of a new home declined 11.1% (+5.8% y/y) to $456,800 following a 9.7% May decline. These sales price data are not seasonally adjusted.

Sales weakness prompted a 2.2% increase (32.1% y/y) in the number of unsold new homes to 457,000, the most since April 2008. The seasonally adjusted months' supply of new homes for sale rose to 9.3 in May from 8.4 in May. It remained up from a record low of 3.3 months in August 2020. The median number of months a new home stayed on the market fell to a record of 2.5 months. These figures date back to January 1975.

New home sales activity and prices are available in Haver's USECON database. The consensus expectation figure from Action Economics is available in the AS1REPNA database.

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