New-home sales rebounded in June, but builders warn that affordability concerns persist.
Sales of newly built single-family homes rose 7% last month to a seasonally adjusted annual rate of 646,000 units, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. New-home sales for 2019 are 2.2% higher than the same period a year ago.
But while the numbers were positive in the latest new-home sales report, builders are still cautious on whether the increase will last.
“Though there is a clear demand for new homes, builders continue to wrestle with affordability headwinds, including shortages of buildable lots and skilled labor, that are constraining sales,” says Greg Ugalde, chairman of the National Association of Home Builders.
The NAHB projects that new-home sales will see a modest 3.5% growth for 2019 due to ongoing affordability concerns.
In June, the inventory of new homes for sale nationwide was 338,000, representing a 6.3-month supply. The median sales price was $310,400, which essentially matched the median price from a year ago. For comparison, the median price of an existing home sold reached a record high in June of $285,700, according to the National Association of REALTORS®.
Last month, new-home sales surged 19.4% higher in the West and 9.5% in the South. However, sales plunged by 50% in the Northeast and by 17.6% in the Midwest, according to the report.
