New single-family home sales in the U.S. climbed 1.6% in June to a seasonally adjusted annual rate of 628,000 units, the Commerce Department’s Census Bureau reported on Friday. The increase followed two consecutive monthly declines and uses contract-closing data, which comprise only a small portion of overall U.S. home transaction volume.
The June pace was calculated from sales recorded at contract closing and reflects the Census Bureau’s measure for newly built single-family homes. While the month-over-month movement showed improvement, activity remained lower compared with the same month last year: sales were down 5.6% versus June of the prior year.
Price trends for new single-family homes softened on a year-over-year basis. The median price in June was $398,300, a drop of 2.7% from June of the previous year.
Mortgage rate backdrop
Borrowing costs continue to present obstacles for prospective buyers. The average interest rate on a 30-year fixed-rate mortgage has climbed to its highest level since August of last year, reducing affordability for many would-be purchasers.
Two widely followed market indicators pointed to elevated mortgage rates in recent days. Freddie Mac reported on Thursday that the average national 30-year mortgage rate rose to 6.58% for the week. Separately, the Mortgage Bankers Association said the 30-year mortgage contract rate reached 6.69% in the week ended July 17. Both readings were noted as 11-month highs.
The persistence of higher mortgage rates was attributed in the report to inflation concerns among Federal Reserve officials and bond market participants, a dynamic that the data said will likely leave limited near-term relief for buyers looking to finance a new home purchase.
Context and implications
June's uptick reverses a brief downward trend in new single-family home sales but does not erase year-over-year weakness. The combination of lower median prices for new homes and higher financing costs creates a mixed picture for housing-sector activity in the near term.