NEW-HOME SALES SLOW MORE THAN EXPECTED IN JUNE!
Sales of new single-family homes came in at a seasonally adjusted annual rate of 676,000 units in June — the slowest pace in 14 months, signaling that builders remain tentative on taking contracts due to construction material uncertainties.
The newest numbers from the U.S. Census Bureau and Department of Housing and Urban Development were down 6.6% below May’s rate of 724,000 units, itself revised downward from the previously reported 769,000.
It’s the third consecutive month that new-home sales were lower than the prior 30-day period. Since peaking at a rate of 993,000 units in January, momentum for the new-home segment has lost significant steam. New-home sales remain up 13.5% on a year-to-date basis, but it’s clear that supply chain constraints are providing a major headwind to the market.
“The June data came in lower than expected, and we anticipate an upward revision next month,” said Robert Dietz, chief economist at the National Association of Home Builders (NAHB). “Nonetheless, sales have trended lower as construction costs have increased and builders have sought to manage material delays and cost challenges in the construction pipeline, in addition to dealing with shortages of lots and labor in many housing markets.”
“Sales continued to trend lower in June as some builders slow sales contracts to manage supply-chains, amidst longer delivery times and higher construction costs,” said NAHB Chairman Chuck Fowke, who has been warning industry observers of material input issues for months. “While lumber prices have shown some improvement in spot markets, these declines take time to translate into lower construction costs. Moreover, other items like [oriented strand board] remain elevated.” Arnie Aurellano, Scotsman Guide July 26, 2021.