Sales of newly built houses in the U.S. rebounded overall in June from May's record low but still continued to drop in the West.
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 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 of as much as $8,000 for buyers expired at the end of April.
"If there's a bright spot, it's that new home inventories remain extraordinarily lean," said Michael D. 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, though, comes with an asterisk, 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."
A slightly more bullish analyst said two figures in the Commerce Department report point to improvements ahead. First, the number of new homes for sale slipped to its lowest level since September 1968, said Patrick Newport, an economist at IHS Global Insight.
"At some point, probably soon — since we expect job growth to stimulate housing demand — builders will need to restock by ramping up on starts, or they will lose sales," Newport said.
The other positive figure to Newport was a drop in the median time for a sale, known as the turnover rate, which fell by 1.7 months to 12.4 months. That was the shortest turnover rate in a year and the largest drop ever.
He forecast that new home sales will slip to 368,000 this year from 374,000 last year but pick up next year to 528,000 and continue growing in 2012 to 781,000.