New house sales in the United States fell for the third month in a row in June, despite the prices dipped from their record high and supply increased, government data said Monday.
The seasonally adjusted annualized rate of 676,000 new homes sales reported by the Commerce Department last month was much less than expected and provided the latest evidence the real estate boom seen during the pandemic is tapering off.
"Demand is mean-reverting to its pre-COVID-19 pace, after the dash to the suburbs triggered by the start of the pandemic," Ian Shepherdson of Pantheon Macroeconomics said.
Sales in June were 6.6% lower than May's downwardly revised rate while the median sales price, not seasonally adjusted, declined to $361,800, down from its peak of $380,700 the month before.
Supply increased to 6.3 months at the current sales pace, rebounding from the low of 3.5 months seen last summer, when buyers flocked to the real estate market, fueled by low mortgage rates and the disruptions to daily life COVID-19 created.
Compared to the same month last year, sales were 19.4% lower.
"We hope that a sustained strengthening in the labor market will boost activity again later in the year, but today's data should be the final nail in the coffin of the 'housing boom' narrative in the media," Shepherdson said.
The fall in sales was uneven, with the Northeast seeing a massive 27.9% decline, the South falling 7.8%, and the West dropping 5.1%.
Sales rose in the Midwest by 5.7%.