New Home Sales Bounce Back in June

By:: Kara Johnson | July 26, 2010

New home sales rebounded in June, increasing 23.6 percent from the all-time low reported for May, according to figures released this morning by the Commerce Department.

Sales of new single family homes were at a seasonally adjusted annual rate of 330,000 units in June, up from a downwardly revised rate of 267,000 in May. The June rate was better than analysts had expected, but is still the second-lowest rate reported by the Commerce Department since it began tracking the data in 1963.

On an annual basis, the June rate is down 16.7 percent from the June 2009 rate of 396,000. The median sales price was $213,400, down 0.6 percent from the June 2009 median of $214,700.

New home sales took a huge drop in May following the expiration of the homebuyer tax credit program at the end of April. Revised figures released this morning show that sales fell a whopping 36.7 percent in May, down from April’s revised rate of 422,000 units. The June rebound only made up about two-fifths of that decline.

Sales were up in three of the four major U.S. regions in June, but declined 6.6 percent in the West. The rebound was strongest in the Northeast, which saw a 46.4 percent increase, followed by the South with 33.1 percent and the Midwest with a 20.5 percent gain.

The number of new homes available during the month fell slightly, to 210,000 from 213,000 the month before, representing a 7.6 month’s supply. That’s down from a 9.6 month supply in May, owing to the increased rate of sales.

The Commerce Department cautions that figures reported in its monthly housing reports are subject to significant sampling error and that several months are needed to establish a trend. Initial figures may be significantly revised as researchers obtain additional data; the May figure of 267,000 was downwardly revised from a figure of 300,000 initially reported last month.

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