New Home Sales Slip Slightly In June

Aug. 6, 2004
Sales of new single-family homes easily set a record for the May-June period, the Commerce Department reported.

Sales of new single-family homes easily set a record for the May-June period, the Commerce Department reported.

Fueled by strong population and household growth, improving economic conditions, a favorable financing climate and the continued solid investment potential of new homes, sales of new single-family homes hit a seasonally adjusted annual rate of 1.326 million units in June. This rate was only marginally below the record 1.337-million unit pace set in May and stood 11.1 percent above sales in June 2003.

“Buyer demand for new homes remains quite strong as job growth proceeds and consumer confidence builds,” said Bobby Rayburn, president of the National Association of Home Builders (NAHB) and a home and apartment builder from Jackson, Miss. “NAHB’s Housing Market Index, based on our monthly surveys of single-family builders, indicates that the perception of an improving economy is helping drive the market.”

“The fundamentals behind housing demand are very positive, and it’s also likely that home buying in May and June was spurred by expectations of rising interest rates later this year,” said NAHB Chief Economist David Seiders. “Ironically, mortgage interest rates are now below the May-June levels, slipping to about 6 percent in recent weeks. While home buying may fade later this year, it now appears that home sales for 2004 will easily surpass the record set last year.”