Sales of new single-family homes dropped in June to the slowest pace in seven months, according to data released Friday that signaled a hiccup for the market.
The annual sales pace for new single-family homes in the U.S. fell 6.8% last month to 482,000, with drops in three of four regions, the U.S. Commerce Department. Only the Northeast saw the sales pace rise.
Economists polled by MarketWatch had expected a June sales rate of 550,000, compared with an original May estimate of 546,000. On Friday the government revised May’s rate to 517,000.
While June’s result is disappointing, economists caution over reading too much into a single monthly report. A confidence interval of plus-or-minus 12.5% for June’s drop of 6.8% shows that the government isn’t sure whether the sales pace rose or fell last month.
Trends signal improvement, with June’s sales pace up 18.1% from a year earlier.
“Even the disappointing June reading still represents progress over a longer time horizon,” said Stephen Stanley, chief economist at Amherst Pierpont Securities. “I view today’s reading for the typically volatile new home sales data as statistical noise.”
The median price of new homes fell to $281,800 in June, down 1.8% from a year earlier.
Recent new-home sales and building rates remain far below long-term averages. But a strong jobs market is expected to support rising home sales by helping more families afford ownership. Earlier this week, mortgage-finance giant Fannie Mae raised its 2015 expectations for U.S. home sales, upping its forecast for new and used homes. A mortgage-industry group also cranked up its forecast this week, raising its expectations for mortgage originations.
Elsewhere in the housing market, a recent report on existing homes, which make up the bulk of the residential-sales market, showed strong growth for June. However, economists warned about getting too excited over that flurry of activity, noting that some of the recent buying growth may reflect buyers rushing to lock in mortgage rates before they rise further.