New single-family home sales fell more than 5% in June to a seasonally adjusted annual rate of 631,000, according to data from the Census Bureau and the Department of Housing and Urban Development.
Revised data for May put the annual rate at 666,000. June’s numbers are down 5.3% from that level, but still represent a 2.4% increase over the original estimate for June.
Robert Dietz, chief economist for the National Association of Home Builders, noted in a blog post on Wednesday that the June estimate was the lowest annual pace since October 2017, and pointed to concerns around affordability.
“While affordability conditions remain positive and the labor market sees low unemployment, prospective home buyers face increased uncertainties as interest rates trend higher and trade war concerns grow,” Dietz wrote in the blog post.
Despite the drop, Dietz expressed confidence in the strong home sales over the first half of the year, noting total sales were 6.9% higher than the same period last year.
“We expect the volume of new home sales to continue to expand along the current modest pace, subject to monthly volatility and supply-side cost concerns,” he wrote.
The median home price on new homes was $302,100 in June, according to Census and HUD data, while the average price was $363,300. Inventory reached 301,000, representing a 5.7 month supply.
Total permits reached 121,639 in June, Census data show, with single-family homes accounting for two-thirds of that. In Colorado, permits are holding steady at 3,674, three-quarters of which were for single-family homes.
Colorado led the mountain region for permits pulled, followed closely by Arizona and Utah, at 3,557 and 2,535, respectively.
Residential building starts increased 4% to an annual rate of $323 billion, according to Dodge Data & Analytics, driven largely by multifamily building, which grew 9% in June.
“Residential building is seeing surprising resilience from multifamily housing, even as apartment vacancy rates have moved up gradually,” according to Robert Murray, chief economist for Dodge. “Although the construction industry is facing increased headwinds during 2018, namely higher material prices and rising interest rates, these have yet to have a discernible negative impact on the broad level of construction starts.”
He added that the construction industry as a whole is benefitting from “the tailwinds of a strong economy, some easing of bank lending standards, and greater funding for federal public works programs as the result of the omnibus appropriations legislation passed in March.”
[Related: New construction jobs slowed in June]