Despite positive signs from other sectors of the housing market, new-home sales took a big hit in June, dropping 6.8 percent, according to the latest figures from HUD and the U.S. Census Bureau.
But many housing experts are dismissing the June swoon as nothing more than a road bump on an otherwise moderately strong recovery.
Sales of newly built, single-family homes fell 6.8 percent to a seasonally adjusted annual rate of 482,000 units in June.
“Despite this month’s drop, we continue to hear from our builders that there is solid traffic in sales offices and a lot of consumer interest in new homes, which should bode well for sales moving forward,” said Tom Woods, chairman of the National Association of Home Builders (NAHB) and a home builder from Blue Springs, Mo.
New-home sales represent only about a 10th of all home purchases, and these figures tend to be unreliable on a month to month basis. The June figure had a margin for error of plus or minus 12.5 percentage points.
A separate report from the National Association of Realtors released Wednesday showed sales of previously owned homes— which make up the bulk of the market — increased 3.2% in June, hitting their highest pace since February 2007.
The inventory of new homes for sale was 215,000 units in June. This is a 5.4-month supply at the current sales pace.
“We knew that there would be ups and downs on the road back to a normal housing market,” said NAHB Senior Economist Robert Denk. “As the economy and job growth strengthens, we expect to see gradual, continued momentum in the coming months.”
New-home sales also averaged an annual rate of 512,000 in the first half of the year, compared with an average of 440,000 for all of 2014, Jim O’Sullivan, chief U.S. economist for High Frequency Economics, told the Wall Street Journal.
“I view today’s reading for the typically volatile new home sales data as statistical noise, most likely just a hiccup on the path to a healthier housing sector,” Amherst Pierpont Securities Chief Economist Stephen Stanley said in a note to clients.