Sunday, December 21st3.0°C
24562
23875

US new-home sales tumble 8.1 per cent in June to annual rate of 406,000

WASHINGTON - Sales of new U.S. homes plunged in June, a sign that real estate continues to be a weak spot in the economy.

New home sales fell 8.1 per cent last month to a seasonally adjusted annual rate of 406,000, the Commerce Department said Thursday. The report also revised down the May sales rate to 442,000 from 504,000.

Buying of new homes fell 20 per cent in the Northeast, followed by less extreme declines in the Midwest, South and West. The modest sales caused the inventory of new homes on the market to increase to 5.8 months, the highest since October 2011.

The median sales price was $273,500, up 5.3 per cent over the past 12 months.

Home sales had been improving through the middle of 2013, only to stumble over the past 12 months due to a mix of rising prices, higher mortgage rates and meagre wage growth.

The pressures from mortgage rates have eased since the start of 2014 and the pace of price increases have slowed. Still, other indicators suggest that home-buying has stalled after rebounding from lows reached during the Great Recession.

The National Association of Realtors reported that sales of existing homes increased 2.6 per cent in June to a seasonally adjusted annual rate of 5.04 million homes. It marked the first time that sales have been above the 5 million-mark since October.

Economists were encouraged by the second straight monthly gain in existing home sales, though those sales are still hovering below the recent peak of 5.38 million sales hit last July.

Nasty winter storms weighed on sales of both existing and new homes in late 2013 and early 2014, making it unlikely that sales can match last year's pace. Sales of existing homes are expected to be below the 5.1 million homes bought last year and the 5.5 million annual sales that would be consistent with a healthy housing market.

Still, there are indications that sales could pick up.

Along with the arrival of spring, average mortgage rates have dropped to 4.13 per cent, from 4.53 per cent at the beginning of this year, according to Freddie Mac. The rate of price gains has slowed as the inventory of homes for sale has improved. But wage growth has barely kept pace with inflation, reducing how much income people have to spend and save for down payments.

The Canadian Press


Read more Business News

23041


Recent Trending




Today's Market
S&P TSX14468.26+121.51
S&P CDNX676.54+11.04
DJIA17804.8026.65
Nasdaq4765.38+16.983
S&P 5002070.65+9.42
CDN Dollar0.8626+0.001
Gold1197.90+2.00
Oil56.50+2.39
Lumber338.00-0.70
Natural Gas3.326-0.138

 
Okanagan Companies
Pacific Safety0.12-0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.25-0.03
Cantex0.03-0.005
Anavex Life Sciences0.1726+0.0026
Metalex Ventures0.05-0.005
Russel Metals25.58-0.42
Copper Mountain Mining1.55-0.02
Colorado Resources0.120.00
ReliaBrand Inc0.011-0.0089
Sunrise Resources Ltd0.05-0.005
Mission Ready Services0.215-0.01

 
24130


23265

FEATURED Property
19999641605 Griffiths Place
7 bedrooms 8 baths
$949,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


My final thoughts on real estate

This will be the last column I write on real estate. Largely because at the end of the year I will be handing in my license. After 20+ years of working in land development, resort development and rea...


Reflecting on the end of the year

The importance of the end of the year and the Christmas holidays is profound. It is a time to reconnect with family and traditions that have made us who we are. But the year-end has always been a time...


Parenthood: Estates, insurance & taxes

It is now even more important to ensure your loved ones are well looked if anything should happen to you. Here are a few topics to consider helping you prepare for some of the unexpected events that c...

_



24111




Member of BC Press Council


24433