New home contracts rose slightly in June, up 0.6% from May. Still, the annual pace of 627,000 units was lower than expected and down 6.6% from last year.
The median home price dropped to $401,800, nearly 5% lower than May’s $422,700. But this doesn’t mean home values are falling. Again, the median price reflects the midpoint of homes sold, so it can change depending on the types of homes sold.
In June, there were 5,000 fewer high-end home sales (over $500,000) and 5,000 more sales in the $300,000–$399,000 range. This shift in sales mix pulled the median price lower.
What’s the bottom line?
New home inventory hit 511,000 homes at the end of June – the highest since 2007. But only 119,000 of these homes were completed and move-in ready. The rest are still being built (271,000) or not yet started (121,000).
So while inventory looks high, the number of homes ready for buyers today is still limited, especially given the historic shortage of existing homes for sale.