New Home Sales Tumble in June; May Sales Sharply Revised

The second quarter closed out with a sizable drop in new home sales, even as prior gains were revised downward.

The Commerce Department reported on Thursday that sales of new homes in June were at an estimated seasonally adjusted annual rate of 406,000, reflecting a decline of 8.1 percent from May.

May's sales rate, originally reported at 504,000, was revised down to 442,000, erasing much of the 18.6 percent gain that had been recorded previously.

Economists surveyed by Econoday had predicted a slide in new home sales to an annual rate of 475,000. Based on its own application survey, the Mortgage Bankers Association had forecast a sales pace of 386,000, an increase from its unrevised estimate of 374,000 sales in May.

June's decline represents yet another setback in the housing recovery, which has stalled on the sales front for most of the year.

The Commerce Department's report shows sales slipped in all regions, with the Northeast seeing the biggest percentage decline at 20.0 percent (to a rate of 24,000). In terms of sheer sales volume, the South posted the steepest drop, with sales falling from 231,000 to 209,000 (a 9.5 percent decline).

Elsewhere, the Midwest recorded an 8.2 percent monthly drop to an estimated sales rate of 67,000, while the West reported a 1.9 percent decrease to a rate of 106,000.

The median sales price of new homes sold in June was $273,500, while the average price was $331,400, the government reported.