New home sales fell hard in June, down 8.1 percent after two months of gains. Compared to June of last year, sales were down 11.5 percent.
The prior month’s data was revised to show less growth, indicating the housing market is struggling to regain its footing.
The Commerce Department reported on Thursday that sales dropped 8.1 percent, the largest decline since July 2013, to a seasonally adjusted annual rate of 406,000 units. That’s far below the 479,000-unit pace anticipated by many economists.
May’s sales pace was revised to 442,000 units from the previously reported 504,000 units.
The surprising decline in new home sales comes in the wake of some positive signs over the past few months, including mortgage rates that are well off their September 2013 peak and a quicker pace of job growth.
However, home prices overall have steadily risen as supplies of existing homes for sale remain tight.
The inventory of new houses on the market rose 3.1 percent to 197,000 units, the highest number since October 2010. At June’s sales pace it would take 5.8 months to clear the supply of houses on the market, the highest since October 2011.
New home sales fell last month in all four regions, declining by 20 percent in the Northeast.