New Home Sales: Sharp Drop

Bottom Line:   New home sales were sharply lower in June, even more than expected, and there were negative revisions to the gains seen in May, as well as April and March data. Sales were nearly 20% below year-ago levels and falling sharply. New home sales account for a much smaller share of housing activity than existing home sales (about 10% of existing) and tend to be more volatile, but this report confirmed the trend seen in other reports. Most more timely indicators and Nowcast models suggest sales have fallen even further in July.New Home Sales FELL by 8.1% to 590k, after the prior month was revised  lower to 642k.  Sales for March were revised down from +715k to +707k as April were revised down from +629k to +604k. This compared with market expectations for a decline to 655k, from the unrevised May level of 696k.   Sales are now 17.4% BELOW their year-ago level.
 
The Inventory of Homes Available for Sale ROSE by 2.2% to 457k. Inventories are now 32.1% ABOVE their year-ago.                                 
Combined with the decline in sales, the Months' Supply increased to 9.3 months from 8.4 months. This is modestly ABOVE a normal level of 6.0 months.
 
Home Prices FELL, but median prices were still 7.4% ABOVE their year-ago level and average prices 5.8% ABOVE their year-ago level.