WASHINGTON (AP) – Americans bought fewer new homes in June after sales jumped to a two-year high in May. The steep decline suggests a weaker job market and slower growth could make the housing recovery uneven.
The Commerce Department said Wednesday that sales of new homes fell 8.4 percent last month from May to a seasonally adjusted annual rate of 350,000. That’s the biggest drop since February 2011.
Sales in the Northeast plunged 60 percent in June to the lowest level since November.
Nationwide, sales in May and April were revised much higher. June’s sales pace is 15.1 percent higher than the same month last year. But sales remain well below the 700,000 annual rate that economists equate with healthy markets.
“While a housing recovery is under way ... fits and starts are to be expected and clearly this summer is one of the ‘fits,’” Dan Greenhaus, chief economic strategist at BTIG LLC, said in a note to clients.
The housing market has started to show signs of recovery this year.
Builders are more confident and breaking ground on more homes. Mortgage rates are at record lows. And home prices nationwide have stabilized after losing a third of their value in the past six years. Sales of new and previously occupied homes have risen, although the increases have been choppy.
Sales of previously occupied homes fell in June to their lowest level since October. But sales were up 4.5 percent from a year ago, evidence that a modest recovery is still under way.
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