Home Prices Rise in June

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Home prices continue their rise across the country, according to data released recently by the U.S. Census Bureau and the Department of Housing and Urban Development. New single-family houses in June 2016 were at a seasonally adjusted annualized rate of 592,000, 3.5 percent above the revised May rate of 572,000 and 25.4 percent above the June 2015 estimate of 472,000.

The median sales price of new houses sold in June 2016 was $306,700; the average sales price was $358,200. The seasonally adjusted estimate of new houses for sale at the end of June was 244,000. This represents a supply of 4.9 months at the current sales rate.

“Although the key observations for June are statistically insignificant, the year-to-date trend is clearly positive: Actual new homes sold reported so far this year are up 11 percent over the first half of 2015,” says Chief Economist Jonathan Smoke. “Plus the increase in the seasonally adjusted annualized rate of new home sales beat analyst expectations. At the June pace of new home sales, the market is up 25 percent over last year, when mortgage rates were rising. However, we unfortunately aren’t seeing signs that builders are expanding offerings of more affordably priced homes.

“There was an estimated 54,000 new home contracts signed in June – the month’s highest volume since June 2007, when there was a surplus of houses for sale.  The key difference between then and now is that 40 percent of the new homes sold in 2007 were already built when they were purchased. This June, only 31 percent of new homes sold were completed, indicating that builders are being more conservative. At this point in time, in order to see a substantial gain in sales of new homes, builders need to find a way to build affordable houses that will appeal to first-time buyers.”

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