Economic Watch: New Home Sales Drop in June

Sales of new single-family houses in June were at a seasonally adjusted annual rate of 406,000, according to estimates released Thursday by the U.S. Commerce Department. This is 8.1% below the revised May rate of 442,000 and is 11.5% below last year's June figure of 459,000.

A survey of economists polled by MarketWatch showed analysts had expected a drop in June after May's high numbers, but not this large a decline.

The Commerce Department is offering no explanation for the revision of May's numbers.

All regions show declines in June with the the South, the largest region in this report, posting a 9.5% drop.

Signals from the new home sector have been mixed, notes Bloomberg, with the housing market index from the nation's home builders showing strength in sales and expectations of sales, but not housing starts and permits which have been plummeting.

New home sales measure the number of newly constructed homes with a committed sale during the month. The level of new home sales indicates housing market trends and, in turn, economic momentum and consumer purchases of furniture and appliances. This affects trucking both from the transport of raw materials used in building homes as well as the materials used to furnish them.

Meanwhile, the National Association of Realtors reported that sales of existing homes increased 2.6% in June to a seasonally adjusted annual rate of 5.04 million homes. It was the first time that sales have been above the 5 million-mark since October.