New Residential Sales Head Back Up in July

New single-family home sales rebounded from disappointing June data, reaching a seasonally adjusted annual rate of 507,000, according to estimates released jointly today by the U.S. Census Bureau and HUD.

The June data determined that new single-family home sales were at a seasonally adjusted annual rate of 481,000, 6.8 percent below the revised May rate of 517,000 and is 18.1 percent above the June 2014 estimate of 408,000.

Sales of new single-family houses in July 2015 were 5.4 percent above the revised June rate of 481,000 and 25.8 percent above the July 2014 estimate of 403,000, the report stated.

"New home sales showed a respectable rebound of almost 26 percent annual growth in July after disappointing with June’s drop and downward revisions for three previous months," said Selma Hepp, Trulia's chief economist. "Volatility is common for new home sales, but as other housing data released last week have shown, the housing recovery is making steady strides forward. The robust improvements in last week’s new housing starts numbers are especially encouraging for new home sales going forward with single-family starts growing at its fastest pace since the recession."

The median sales price of new houses sold in July 2015 was $285,900, while the average sales price was $361,600.

"Actual sale prices have increased because the composition of homes sold has shift away from starter or first time buyer homes and towards move-up buyers," said David Crowe, NAHB's chief economist and SVP. "At the same time, builders are facing higher costs for labor and lots. That trend will continue as the home building industry continues to expand and must pay higher prices for the resources needed. Material costs have remained calm as the world economy slows and demand from other markets have cooled."

The seasonally adjusted estimate of new houses for sale at the end of July was 218,000, the highest level since March 2010, the report said. This represents a supply of 5.2 months at the current sales rate.

"Inventories of existing homes however have not improved significantly for several years," Crowe said. "More existing homes on the market will help feed the first time home buyer delayed demand as well as free up current home owners to buy a new home."

Hepp added, "Slow new home sales, however, reflect both demand and supply side issues. With builders focused on higher-end construction, many first-time buyers, who typically gravitate towards more affordable homes, are being excluded from the market."

Source: NAHB

Click here to view the U.S. Census Bureau & HUD New Residential Sales data.