One key area of the U.S. economy appears to headed in an emphatically downward direction: sales of new U.S. single-family homes fell to an eight-month low in June and data for the prior month was revised sharply down.
Figures released Wednesday by the U.S. Commerce Department showed new home sales dropped 5.3% to a seasonally-adjusted annual rate of 631,000 units last month, a gulch not seen since October 2017. May's sales pace was revised down to 666,000 units from the previously reported 689,000 units.
Economists had forecast new home sales -- which account for about 10% of housing market sales -- falling only 2.8% to a pace of 670,000 units in June.
New home sales are drawn from permits and tend to be volatile on a month-to-month basis. They increased 2.4% from a year ago. Housing market data has weakened in recent months, with homebuilding falling to a nine-month low in June and home resales declining for a third straight month. Building permits also dropped to a nine-month low in June.
The sector has been plagued by rising building material costs and shortages of land and labour, which have put a squeeze on the supply of houses available for sale and kept house prices elevated.
The median new house price fell 4.2% to $302,100 in June from a year ago. There were 301,000 new homes on the market in June, up 1.7% from May. Supply is just over half of what it was at the peak of the housing market boom in 2006.
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