Go to the Globe and Mail homepage

Jump to main navigationJump to main content

A new home is being built next to a home with a for sale sign in Vienna, Virginia in this file photo. (LARRY DOWNING/Reuters)
A new home is being built next to a home with a for sale sign in Vienna, Virginia in this file photo. (LARRY DOWNING/Reuters)

U.S. new home sales post biggest drop in almost a year Add to ...

Sales of new U.S. single-family homes fell sharply in June and the prior month’s data was revised to show less robust growth, suggesting the housing market would struggle to regain momentum.

The Commerce Department said on Thursday that sales dropped 8.1 per cent, the largest decline since July 2013, to a seasonally adjusted annual rate of 406,000 units.

More Related to this Story

May’s sales pace was revised to 442,000 units from the previously reported 504,000 units.

Economists polled by Reuters had forecast new home sales at a 479,000-unit pace last month. Compared to June of last year, sales were down 11.5 per cent.

A run-up in mortgage rates, as well as a shortage of properties for sale, pressured home sales late last year, raising concerns that a weak housing market could undercut economic growth.

Though housing appears to be on the mend with mortgage rates well off their September peak and job growth gathering momentum, the sector will probably continue to lag the overall economy.

Last month, new home sales fell in all four regions, declining by 20 per cent in the Northeast.

The inventory of new houses on the market rose 3.1 per cent to 197,000 units, the highest number since October 2010. At June’s sales pace it would take 5.8 months to clear the supply of houses on the market, the highest since October 2011.

Follow us on Twitter: @GlobeBusiness

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories