US sales of new homes im­proved mod­estly

Kuwait Times - - BUSINESS -

US sales of new homes perked up slightly in June, a sign that more would-be buy­ers are seek­ing newly built prop­er­ties. The Com­merce De­part­ment said yes­ter­day that new-home sales edged up 0.8 per­cent to a sea­son­ally ad­justed an­nual rate of 610,000. Sales have reg­is­tered a healthy 10.9 per­cent in­crease so far this year. The gains come amid a broader short­age of homes listed for sale, likely push­ing more buy­ers into new con­struc­tion. De­spite steady growth since the hous­ing bub­ble be­gan to burst a decade ago, sales of new homes re­main be­low his­toric av­er­ages. Builders are con­tend­ing with a lack of land for con­struc­tion, a short­age of work­ers and ris­ing costs for some ma­te­ri­als.

Sales last month ad­vanced in the Mid­west and West, but pur­chases were un­changed in the North­east and dropped in the South. The June sales re­port in­di­cates that the price and sup­ply pres­sures will con­tinue. The me­dian sales price of a new home fell 3.3 per­cent to $310,800. But the me­dian ob­scures the over­all trend of new con­struc­tion to­ward more ex­pen­sive homes. Just 13 per­cent of new homes sold last month cost less than $200,000, com­pared to the 17 per­cent for all of 2016 and 19 per­cent for 2015.

There have been sales gains in the price range of $200,000 and $299,000 that over­laps with the me­dian price for ex­ist­ing homes. But new homes that cost more than $500,000 are also a grow­ing share of sales.

There were 272,000 new homes on the mar­ket in June, the most since June 2009. But that ac­counts for only 5.4 months’ sup­ply based on the cur­rent sales rate. The gain in new-home in­ven­tory has been in­suf­fi­cient to off­set the de­clines in sales list­ings of ex­ist­ing homes. The Na­tional As­so­ci­a­tion of Re­al­tors said this week that there were 1.96 mil­lion ex­ist­ing homes for sale in June, a 7.1 de­cline from a year ago. —AP

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