New Home Sales Showing Weakness

New home sales unfortunately join the host of housing data showing weakness. Sales fell 5.3 percent in June to a 631,000 annualized rate vs Econoday's consensus for 668,000. The disappointment comes despite price concessions as the median fell a monthly 2.5 percent to $302,100. Year-on-year, the median is down 4.2 percent vs a 2.4 percent rise for sales.

But good news comes from supply which rose 1.7 percent to 301,000 new homes on the market. Relative to sales, supply is at 5.7 months vs 5.3 and 5.6 months in the prior two months.

New home sales in the West, which is a key region for home builders, fell 5.2 percent with this yearly rate at minus 15.0 percent. The Northeast is the smallest region for new home sales but sales here have been picking up, jumping 37 percent in the month for a 21 percent year-on-year increase. Sales in the Midwest and South were weak in June, down a monthly 13.4 and 7.7 percent respectively.

The Spring selling season was a poor one for the housing sector with both new sales and especially resales showing little life. Less-than-favorable mortgage rates are one reason for the slowing as are constraints on new building including scarcity of skilled construction labor as well as materials.