New-Home Sales Plunge 8.1%

Median sales price dropped in most recent month to $273,500, which is up 5.3% over the past 12 months.

Jul 24, 2014 at 12:05PM

New single-family home sales dropped 8.1% to a seasonally adjusted annual rate of 406,000 for June, according to a Commerce Department report released today.

In a double whammy hit to hopes for a continuing housing market recovery, May's new-home sales rate was revised sharply down to 442,000 from the previously published 504,000. Before today's revelation, May's sales were the highest seen since May 2008.

Analysts had expected a dip for June, but their 475,000 estimate proved overly optimistic. 



On a regional level, every part of the nation saw a sales decline. The Northeast led the percentage drop with a 20% decline, followed by a 9.5% decrease in the South. In the past 12 months, national sales of new homes are down 11.5%.

At the current rate of sales, there is an estimated 5.8 months of supply, compared with 5.2 months in May. The median sales price also softened, down $9,100 to $273,500, which is up 5.3% over the past 12 months.

This latest report follows on the heels of a National Association of Realtors report, which offered some respite with a pleasantly positive 2.6% bump for existing-home sales in June.

Today's new-home sales numbers are the latest in a series of mixed messages from the housing market. While existing-home sales are steady, June housing starts plummeted 9.3%. Investors will have to wait until Monday for the next news nugget, when June pending home sales are announced.

-- Material from The Associated Press was used in this report.

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