The number of new home sales increased slightly during June, according to the latest data from the Census Bureau and Department of Housing and Urban Development.
The data shows total new home sales of 628,000, a 1.6% increase from May, but a drop of 5.6% year over year. Notably, prices were down year over year as well, with the average sales price coming in at $475,400, down 9.5% from May and down 6.5% from a year ago.
Maor Greenberg, co-founder and CEO of Spacial, an AI-powered structural engineering platform for residential construction and a 19-year veteran of the construction and real estate industries, had the following comments about the latest data.
- What falling prices mean: “The fall of the average sales price is notable. It went from $525,200 in May to $475,400 in June. That’s a 9.5% difference and it clears the margin of error. Further, look at the gap between the average price and median: in May, it was $113,200, and now, we’re seeing that June’s difference was $77,100. A drop like that means the impact wasn’t in the middle of the market, but on the higher end. Either expensive homes stopped selling, or they got repriced to sell.”
- Action at lower price points: “Homes priced under $300,000 were 23% of the sales. A month ago it was 18%. A year ago, that number was 16%. Builders are coming down to meet the buyer. These are homes with smaller footprints and lower price points.”
- The 1.6% sales increase doesn’t mean much: “The numbers are noise in a flat market. All drops and gains have been within the margin. The sales numbers aren’t telling a new story.”
- Inventory concerns: “The supply figures look high, but inventory of new houses for sale is 485,000 compared to 501,000 a year ago. It’s because the sales rate is slow, not because new supply keeps coming in. It’s a subtle difference, but a very important one.”
