U.S. new home sales fell to their lowest level in seven months, and May data was revised lower as well. Bobbi Rebell reports.
Big drop in new home sales
A bit of a setback for the housing sector.
U.S. new home sales fell in June to their lowest level in seven months, down 6.8 percent, to a seasonally adjusted 482,000 units. They were expected to hold steady. Also, a surprise: May sales were revised sharply lower.
The good news, on a year over year basis, sales are up more than 18 percent. And the overall housing market recovery remains intact.
Earlier in the week, a report showed home resales jumped to a more than eight-year high in June. Other data showed strength in forward looking indicators, like housing starts and building permits.
IHS Global Insight’s Patrick Newport.
(SOUNDBITE) PATRICK NEWPORT, U.S. ECONOMIST, IHS GLOBAL INSIGHT (ENGLISH) SAYING:
“It’s the single family market that is continuing to struggle, but gradually improve. Single family permits is the key number to watch every month and that number is slowly edging up every month, so the good news is things are getting better the bad news is they aren’t getting better very quickly. “
There’s actually quite a bit supporting housing. For example, the tightening labor market has created more demand among young adults, so-called millennials. The government has taken steps for first-time home buyers to have more access to credit through mortgage finance firms like Fannie Mae and Freddie Mac.