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Sales of new homes fall 6.6% in June

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Sales of new homes fell for a third straight month in June, dropping by 6.6%

WASHINGTON — Sales of new homes fell for a third straight month in June, dropping by 6.6% to the lowest level in more than a year.

The June sales decline left sales at a seasonally adjusted annual rate of 676,000, the Commerce Department reported Monday. That followed a 7.7% sales decline in May and a 10.1% fall in April.

The pace last month was down 19.4% from a year ago and the slowest since April 2020. Housing has been a stand-out performer since the economy began emerging from the steep-but-short pandemic recession in April last year.

The median price of a new home sold in June was $361,800, up 6.1% from a year ago. but down 5% from May, suggesting the surge in prices may be slowing a bit as builders increase inventories. The number of new homes for sale at the end of June increased to 353,000, up 7% from May.

A shortage of homes on the market and rising costs for material such as lumber and also higher labor costs had fueled a sharp jump in prices. But analysts said the trend for sales and price gains has clearly slowed from the red-hot pace seen over the past year as the economy emerged from the pandemic.

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Rubeela Farooqi, chief U.S. economist at High Frequency Economics, noted that new home sales averaged 728,000 at an annual rate in the April-June quarter, down sharply from a monthly average of 926,000 in the fourth quarter of last year.

“The trend has clearly slowed,” she said. “Prices remain above pre-recession levels and are likely a factor weighing on demand for new homes.”

By region of the country, sales of new homes rose 5.7% in the Midwest in June but declined in the other three regions. Sales fell 27.9% in the Northeast and were down 7.8% in the South and 5.1% in the West.

The report on new homes followed news last week that sales of existing homes rose 1.4% in June to a seasonally adjusted annual rate of 5.86 million units with the median price of an existing home hitting a record high of $363,300, up 23.4% from a year ago.

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This story has been updated to correct the month in which the median price of a new home was $361,800. It was June, not May.

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