US new-home sales declined in June for the first time in four months, suggesting high borrowing costs and prices are restraining momentum in the market.
Purchases of new single-family homes fell 2.5% to an annualized 697,000 pace after a downward revision to the prior month, government data showed Wednesday. The median estimate in a Bloomberg survey of economists called for a 725,000 rate.
The median sales price of a new home declined to $415,400 from a year earlier.
While the new-home market has benefited from limited inventory of existing homes, high borrowing costs and still-elevated prices continue to pose affordability challenges. Even so, homebuilder sentiment is at the highest level in over a year, and contractors are applying to break ground on more single-family projects.
Housing-Market Rebound Poses Challenge for Fed's Inflation Fight
The Federal Reserve is anticipated to raise interest rates to the highest level in more than two decades later on Wednesday, which will likely keep mortgage rates elevated in the near term.
The number of homes sold in June and awaiting the start of construction a measure of backlogs rose to the highest level since February 2022.
There were 432,000 homes for sale as of the end of last month, in line with previous readings this year. That represents 7.4 months of supply at the current sales rate.
Source : Bloomberg
