The sales of newly built homes in the United States have taken a slight hit in June as the demand for home buying cools off following a notable increase the previous month. According to the Commerce Department’s report on Wednesday, new home sales fell by 2.5% to an annual rate of 697,000 in June, down from a revised figure of 715,000 in the prior month.
These numbers are seasonally adjusted and indicate the projected number of homes that would be constructed throughout a year if builders were to maintain the current pace each month. Unfortunately, this decline was not in line with expectations on Wall Street, as economists anticipated that new home sales would reach a total of 725,000 for June.
The drop in home sales primarily occurred in the Midwest region. Despite this setback, new home sales have generally experienced an upward trend due to the fact that home builders are among the few entities offering inventory for prospective homebuyers.
Notably, the data from May underwent significant revisions. New home sales were revised to a figure of 715,000 in May, compared to the initial estimate of a 12.2% increase to 763,000.
It is crucial to acknowledge that new home sales data can be quite volatile on a month-to-month basis and are often subject to revisions.
Market Reacts to Lower Home Sales
In response to the news of lower home sales, stocks such as DJIA (-0.00%) and SPX (-0.10%) experienced a decline in early trading on Wednesday. Furthermore, the yield on the 10-year Treasury note dipped below 3.9%. However, some builders’ shares, including those of D.R. Horton, Inc. (DHI) (-1.44%), Lennar Corp (LEN) (-0.15%), PulteGroup Inc. (PHM) (+0.41%), and Toll Brothers Inc. (TOL) (-0.25%), saw an increase during the morning trading session.
