Sales of new homes tumbled in June

By John KellContributing Writer and author of CIO Intelligence
John KellContributing Writer and author of CIO Intelligence

    John Kell is a contributing writer for Fortune and author of Fortune’s CIO Intelligence newsletter.

    New Home Sales Plunge 11.8%
    MIAMI, FL - MAY 27: A "For Sale" sign sits in front of a new home May 27, 2004 in Miami, Florida. According to the Commerce Department new home sales in the United States suffered their largest monthly drop in 10 years in April as rising mortgage rates cooled the housing market from the previous month. New home sales fell 11.8 percent to a seasonally adjusted annual rate of 1.093 million units from an upwardly revised record high of 1.239 million in March. (Photo by Joe Raedle/Getty Images)
    Photograph by Joe Raedle—Getty Images

    Sales of new homes dropped a steeper-than-expected 8.1% in June from the prior month, as the sector reported a sharp decline in demand in the Northeast.

    Sales of new single-family homes came in at a seasonally adjusted annual rate of 406,000, below the downwardly revised May rate of 442,000, according to the Commerce Department. Economists had predicted the rate would total 475,000 in June, according to a survey by Bloomberg News.

    The June figure was about 12% below the same month last year.

    Regionally, new-home sales slid 20% in the Northeast in June from the prior month. The Midwest and South each reported high-single-digit declines, while sales dropped 1.9% in the West.

    The housing sector suffered a mixed performance earlier this year when severe weather diminished demand. That slowdown was worrisome heading into the key spring and summer home-buying season, though some metrics have suggested improvement. Builder confidence has been improving, and existing-home sales have climbed to an eight-month high, according to the National Association of Realtors.

    Meanwhile, the median sales price for new homes sold last month totaled $273,000, compared to $282,600 in May, the Commerce Department said.