New homes sales up in June but still anemic

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Sales of newly built U.S. homes rebounded in June from May’s record low, but it was still the second-worst month in the country’s history.

The Commerce Department said Monday that new homes sold at a seasonally adjusted annual rate of 330,000 units in June, 23.6% above the revised May rate of 267,000 but 16.7% below the June 2009 figure. It was the second-lowest sales pace since the government began collecting such data in 1963.

Sales were up in three out of four regions. The Northeast showed the biggest gain at 46.4%, followed by the South at 33.1%. Sales rose 20.5% in the Midwest, but dropped 6.6% in the West. The median price of a new home slid 1.4% to $213,400 from $216,400 in May.

Sales of new and resale homes were expected to wane after a popular federal tax credit for buyers of as much as $8,000 ceased at the end of April.

“If there’s a bright spot, it’s that new home inventories remain extraordinarily lean,” said Michael Larson, an interest rate and housing analyst with Weiss Research. “We have fewer houses looking for buyers than we’ve had at any point in the last 42 years.”

Even that somewhat good news comes with an asterisk, though, Larson said. There is so much competition from distressed sales of existing homes that builders aren’t able to set their prices at levels they want.

“I expect the housing market to remain challenging for some time,” he said, “especially given the ongoing weakness we’re seeing in the labor market.”

-- Roger Vincent