New Home Sales Surged by 35% in June

New home sales surged in June to the highest level since May of 2008. According to the Commerce Department, the number of single-family homes that sold last month rose to a seasonally adjusted annual rate of 497,000. That equated to a 35% increase over the same month last year and an 8.3% uptick from May.

The news provided a welcome relief after data earlier this week showed that existing-home sales dipped slightly during June. The National Association of Realtors reported on Monday that previously occupied single-family home sales dipped by 1.1% on a seasonally adjusted annual basis last month compared to May. Though, on a year-over-year basis, they were up by 14.5%.

Meanwhile, the Commerce Department said the median price of a new home fell last month by nearly 5% to $249,700, down from $262,800 in May. The most recent data on the existing-home front showed that prices rose by 0.7% in May over April and by 7.3% relative to the same month last year. It was the 16th consecutive month of year-over-year price increases.

Somewhat less optimistically, the housing market continues to be plagued by tight supply. At the current sales rate, the supply of new homes for sale equates to only a 3.9-month supply, down from 4.1 months in May. This is the lowest level in nearly a decade and goes a long way toward explaining the year-over-year increases in home prices. To read more about the housing inventory conundrum, click here.

Shares of homebuilders are trading lower on the news thanks presumably to the sequential price comparison. At the time of writing, D.R. Horton (NYSE: DHI  ) is off by 1.15%, PulteGroup (NYSE: PHM  ) by 1.55%, Lennar Corp. (NYSE: LEN  ) by 3.66%, and Toll Brothers (NYSE: TOL  ) by 3.46%. While all of these companies have seen their volumes pick up over the past year, we should know a lot more about the current environment tomorrow, with the release of earnings from D.R. Horton and PutleGroup, the nation's two largest homebuilders.

Housing rebound or not, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2555343, ~/Articles/ArticleHandler.aspx, 9/28/2016 1:23:03 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,202.76 -25.54 -0.14%
S&P 500 2,155.56 -4.37 -0.20%
NASD 5,295.39 -10.32 -0.19%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/28/2016 1:07 PM
DHI $30.11 Up +0.09 +0.30%
D.R. Horton CAPS Rating: ***
LEN $42.89 Up +0.17 +0.41%
Lennar CAPS Rating: **
PHM $19.94 Up +0.05 +0.25%
PulteGroup CAPS Rating: ***
TOL $29.20 Down -0.10 -0.34%
Toll Brothers CAPS Rating: ***